Friday 23 February 2018

Leo's mortgage mantra: emigrate, move home or borrow from parents

Taoiseach Leo Varadkar
Taoiseach Leo Varadkar
Leo Varadkar is accused of showing a 'posh boy' attitude. Photo: AFP/Getty Images

Laura Larkin and Mark Keenan

Taoiseach Leo Varadkar sparked an angry backlash by suggesting people ask the "bank of mum and dad" to secure a deposit for a home.

Mr Varadkar was accused of displaying his "posh boy" credentials when he told the Dáil that "lots of us did".

He also suggested that young people emigrate or move back in with their parents to save up the necessary lump sum.

The Fine Gael leader said that the only time in history people were not faced with the need to gather significant amounts was during the boom when 100pc mortgages were available, adding this was not something he wished to return to.

Responding to questions from Labour leader Brendan Howlin on people faced with the "hopeless task" of gathering deposits, Mr Varadkar suggested getting money from parents.

"It has always been the case that a person needs to raise a deposit to buy a house. People do it in many different ways.

"Sometimes people go abroad for a period and earn money. Others get money from their parents. Lots of us did.

"Others get money through other loans. Sometimes people stay at home for a period and raise a deposit in that way," he added.

Fianna Fáil's housing spokesman Barry Cowen told the Irish Independent: "Leo Varadkar has put his posh boy credentials on display with his latest commentary on the housing market.

"Clearly he has very little understanding of the struggles facing families if he thinks young workers can simply turn to the 'bank of mammy and daddy' when they need a deposit to get on the property ladder."

Former housing minister Alan Kelly said Mr Varadkar needed to "step back into the real world".

"I don't know what world the Taoiseach is living in. Clearly he must think everybody's mommy and daddy has €20,000 squirrelled away.

"Mr Varadkar would want to step back into the real world and talk to a few people in order to get a grasp of what's really going on in the housing market."

Meanwhile, a report released today by the Society of Chartered Surveyors of Ireland (SCSI) makes grim reading for those seeking to buy or rent a home in the year ahead. It predicts a "significant lack of rental properties of all sizes in 2018".

It predicts rents and house prices are expected to rise by 8pc this year, despite the Central Bank's strict lending regime and the introduction of rental caps to Dublin and Cork

The SCSI Residential Property Review and Outlook 2018 says most surveyors believe the rental market is in "crisis".

"We estimate that for every three landlords who are selling their buy-to-let property in Dublin, only one new landlord is entering the market," said the SCSI's John O'Sullivan.

"Two-thirds of private landlords own just one property and increasingly they seem to be of the view that it's simply more hassle than its worth."

But he said surging rents were exacerbating tenants' ability to save large deposits to purchase their own home.

Meanwhile, 92pc of members said their seller's price expectations have increased, up from 86pc the previous year. Development land rose by 14pc in 2017, representing a 25pc hike over two years.

Irish Independent

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