Friday 23 March 2018

Behind the hall door... Ireland's property crisis

Homes are hard to find, loans are difficult to get and rents have gone through the roof. Down the decades, our love affair with bricks and mortar has been both financially rewarding and ruinous... and helped shape the nation we live in. John Meagher and Graham Clifford report

Lynn and Percy Pennefather at their home in Balally, Dundrum. Photo: Arthur Carron
Lynn and Percy Pennefather at their home in Balally, Dundrum. Photo: Arthur Carron
Mary and Michael Clifford at their home in Knocklyon, Dublin. Photo: Mark Condren
Anne Joyce, holding a photograph of herself, her husband, Bernard O Caollai and daughter, Catherine, when they were living in Ballinteer, outside her current home in Dun Laoghaire. Photo: Damien Eagers
Joe and Casandra McCaffrey with their daughter Roisin (3) outside their home in Terenure which they rent out. Photo: Damien Eagers
Steph Sinnott and her two children Aoibhe (7) and Alex (11 months) at her rented home in Charlemont, Griffith Avenue, Dublin. Photo: Caroline Quinn

Just two kilometres north of O'Connell Street in Dublin, and tucked in behind the bend of the busy multi-lane road connecting the city centre with Howth, you will find the urban development that changed our relationship with property forever.

The circular Marino Park and its radiating streets were laid out in the early years of the Irish Free State in a visionary scheme rubber-stamped by the WT Cosgrave government. It followed the Garden City style of housing devised in Victorian Britain, where each three-bedroom house had a small front and rear garden and had a subtly different design to its neighbour.

That first government inherited arguably the worst housing crisis this country has ever known, especially in Dublin. The 1913 Strike and Lockout had highlighted the horrendous conditions that up to half the city's residents lived in. Tenements were falling down and new housing and new ideas were urgently required.

The scheme at Marino must have seemed to be a nirvana for its first dwellers, who were chosen by lottery and the size of their families. Not only did they have more space than they would have known, and gardens too, but each house had hot and cold running water.

Crucially, though, these people who only known a life of paying rent - often to slum landlords - were able to buy their houses through a well-conceived tenant-purchase plan.

Ruth McManus, an urban geography specialist at St Patrick's College, Drumcondra, and the author of an acclaimed book on Dublin's suburban development in the early 20th century, says it would not be overstating matters to say that Marino was the scheme that helped light the touch-paper for home ownership in Ireland.

"It showed that ordinary people could buy their own homes - and attractive three-bedroom ones too, with front and rear gardens," she says, adding that a way of expressing one's citizenship in the early state was to own a home, rather than rent it.

"The Marino scheme worked because it was on a comparatively modest scale," she adds. "Typically, there are 10 to 12 houses per acre and, in total, maybe 1,500 were built. Later, far less successful suburban developments such as Crumlin [eight kilometres south of Marino], had 6,000 houses and they weren't built as well."

Today, the 90-year old houses at Marino are highly covetable in a market where demand outstrips supply, and it would not be unusual to have to stump up €400,000 for a home there.

Although nobody could make the argument that today's housing crisis is as grave as the one Ireland was confronted with in those early years of independence, there's no doubt that we face enormous challenges in the years to come: Tens of thousands are on waiting lists for social housing; the private rental sector is strewn with pitfalls, including rapidly rising rents (in Dublin); and, even those earning well above the average industrial wage are unable to afford to buy homes in Dublin and surrounding counties.

Less than a decade after a property bubble helped bring the country to the brink, we seem to be in yet another housing-related mess - and we've been in a similar predicament many times before too.

Tom Dunne, Head of School of Surveying & Construction Management, DIT Bolton Street, believes the current situation is an especially pressing one: "From the tragedy of homeless families to the angst of those searching for a home under severe pressure, housing shortages have severe effects on personal lives."

And, he believes, the consequences of increasing rents and prices on competitiveness are a substantial threat to recovery and future growth.

Dunne takes a keen interest in our historical relationships with housing, because decisions from governments and local authorities long ago have helped shape the market and the landscape that we know today.

"Having experienced decades of increasing home ownership it is often forgotten that up to World War I, in Ireland as elsewhere, the private rented sector dominated," he says. "Most households were renters with only the very wealthy owning their homes. Few enough were lucky to rent from socially motivated landlords.

"By the early 20th century it was appreciated that good, secure housing can make a significant contribution to reducing the cost of a decent health system, an example of joined-up government policy which facilitated the development of the welfare state. Accordingly, housing became a responsibility of the state and was subsidised or provided by local government in the form of social housing."

It was after World War II that the State really pushed the idea of home ownership. "With assistance from local authorities in the form of grants, property tax relief and loans on favourable terms, the lower middle and middle classes who could afford to pay for their accommodation were assisted into home ownership," Dunne says.

"Central government helped through tax breaks such as mortgage interest relief. Also supportive was the growth of building societies which were assisted by government tax breaks for savers thereby generating the necessary capital base to be lent as mortgages. Overall there was very significant and costly government support for home ownership funded by the taxpayer."

It's a policy that exists to this day and has been steadfast from one government to the next. Dunne believes that a desire to be a homeowner is, in a large part, down to a poor rent culture, where there's virtually no security of tenure or guarantees about rent increases.

While many of us believe the Irish have an obsession with home ownership, such a notion is rubbished by Conor Skehan, chairman of the government-advisory body, the Housing Agency. "It's one of those myths that might have been true in the past but is no longer the case," he says. "Home ownership levels peaked in 1991 and have been steadily decreasing ever since."

The figures bear this out. One in seven of us is renting in the private sector, while in Dublin a third of the population live in rented accommodation. Skehan himself rents and says he has no intention of ever buying a home. "We have to stop to think of renting as 'dead money' or for losers," he says. "The mindset is changing, especially as more of us realise that the property that might suit a couple in their 40s with children, is not necessarily going to be suitable for them when they've retired. You'll see much more movement of people in their 60s, including those who are saving now in order to afford the rents they will be paying in their retirement."

He rails against "quick fixes" when it comes to housing - "what we need are slow fixes" - and points out that amid all the talk of the need to build more housing, especially in Dublin, there is a large proportion of vacant housing stock that could potentially be used.

And yet, with migration to Dublin continuing apace, there's persistent talk of the need to develop green-field sites, and greatly expand schemes such as the one in Adamstown, west Dublin, which was launched 10 years ago. Karl Whitney, the author of last year's acclaimed book on Dublin, Hidden City, grew up in Tallaght and says it's important that we learn from the mistakes of the past. "Growing up there, Tallaght felt fragmented. But there were lots of good things: people making efforts to foster a sense of community in a new place. When you talk to people about the early days of Tallaght's expansion, they mention the lag between the building of houses and the provision of services. The bus service couldn't accommodate demand. Much later, with the development of the Square and the council buildings and the construction of the Luas line, Tallaght began to get the services it needed.

"Tallaght wasn't unplanned - it formed one of a number of new towns to the west of the city, including Clondalkin, Lucan and Blanchardstown - but it was characterised by compromise and sprawl. It's tempting to say that if, given time and investment, Tallaght can succeed then any subsequent developments can too."
Whitney wrote the book during the crash and says the experience made him think about what we view as 'home': "I had friends who had bought apartments for too high a price just before the crash, and in the aftermath they struggled with the extremely high repayments. When you resent the property you've bought because you've paid so much for it, can you ever consider it home?"

And what of that common Irish idea of 'home'? "I think the three-bedroom house was, for many years, the standard style of housing in Ireland, and it's still very desirable. On one level I don't see anything wrong with it: it's spacious, you get a garden and so on. But on another level, if all you have are semi-detached streets, that helps cause sprawl, and that has implications for services like public transport."

It's a view echoed by Ruth McManus who says that for all the success of the Marino scheme in the 1920s, such comparatively low density housing ensured that are cities - and bigger towns too - had to expand at their edges, and often at a huge price.

Ultimately, though, Marino stands testament to the good that can be done when it comes to housing policy - as long as there's long-term vision, a desire for change, and money.


Who? Lynn and Percy Pennefather

Bought their home in: 1968

Where? Balally Hill, Dundrum

Type of home: 3-bedroom semi-detached

Price in 1968: £3,200

Asking price today: €350,000

'We were married in 1967 and briefly rented a garden flat in Whitechurch. We actually bought our home here in Dundrum as a 'site unseen', we effectively bought it from the plans.

At the time we had to provide a 10pc deposit and actually got a bank loan to cover half of that as we were just starting out.

Over the years we made some minor changes such as building a little conservatory at the back. It was mainly for when the kids came in changing their football boots and so on.

It's been a fantastic home to us and our three children Caroline, John and Stuart who are all living away from home now.

We never bought the house to climb the property ladder as younger people started doing in recent decades, it was always going to be our family home for good. It was never an investment. During the boom we did briefly look at moving on, the house would have been worth around half a million euro about a decade ago, but we decided not to sell. A similar home in our area actually sold for something in the region of €750,000 when prices were at their height in Dublin, which of course was crazy money.

The age profile of the area has changed a lot over the years as young couples moved in to start their lives. There are still about 10 families who bought when we did still living here. There's a great community spirit in this area and last year we were named the tidiest estate in the country which obviously builds local pride.

Will we ever sell and move on? It's unlikely, I could only see that happening if there are changes to our health and we need a smaller place and garden. For now though we're here to stay and we love living on Balally Hill."


Who? Mary and Michael Clifford

Bought their home in: 1974

Where? Knocklyon, Dublin

Type of home: 3-bedroom semi-detached

Price in 1974: £9,100

Asking price today: €360,000.

'I remember when we first moved in, it was a hugely exciting time as this was the first ­estate built in Knocklyon which was, at the time, a very ­countrified area. We met in the old ­Zhivago's ­nightclub on Baggott Street, they used to have a ­promotional line as 'the place where love stories begin' and in our case it was very apt!

We managed to scrape together a deposit of £1,500, Michael worked as a garda and I had a job in the National Irish bank on Grafton Street. We paid an extra £100 for an end house. Our mortgage at the time had an interest rate of about 15pc from memory which, of course, was high but we managed.

When we moved in we had nothing but gradually we bought what we needed and had three sons, Stephen, Peter and Robert who luckily are all living locally still. Life was busy but our house well and truly became a home.

We wouldn't have had any family living locally to help with childcare but we somehow got through it.

In the boom years the boys did suggest that we consider selling as prices soared but we're happy here, where would we move to?

When we moved in first there were 250 houses in Knocklyon, that's now jumped to 5,000. In recent years more young families have moved in and it's lovely to see little babies and children in the area just like when we moved in back in 1974. We have a little grandson, Jake, who is two-and-a-half and we love looking after him here in the house from time to time. We're in a little cul-de-sac of eight houses and only two of the original families who moved in are still here today."


Who? Ann Joyce and Breasal O Caollai

Bought their home in: 1984

Where? Dún Laoghaire

Type of home: 4-bedroom terrace

Price in 1984: £49,000

Asking price today: €740,000.

'At the time when we bought here it was purely for ­functional reasons. It was handy for work as we both had jobs out around the Dún Laoghaire area. I originally come from Achill Island while Breasal was from Terenure so it took a little while to settle in here but it was a brilliant move for us and looking back now I'm so glad we did it.

The house is originally Edwardian so we had to do a fair bit of renovations over the years - with the older houses there are always jobs to be done. When we moved our little girl, Catherine, was coming up on four years old and before that we'd rented in Ballinteer.

The mortgage at the time was 12pc, it was the mid-80s and we were in the teeth of a difficult recession. We established businesses here in Dún Laoghaire, worked hard and at times hardly got to enjoy the house because we were so busy - we still are!

At one stage during the boom years we did toy with the idea of moving. The prices had climbed to such a level we had to at least consider it but in my heart of hearts I wouldn't want to live anywhere else so selling up would be a bit pointless at this stage. Dún Laoghaire is a special place to live, the location is everything and while the town has taken a big hit in recent years, not helped by ridiculous parking regulations imposed by the local council, it's still a beautiful coastal community.

While buying the house may have been for functional reasons initially it's been a great home to us and we were fortunate to get it when we did."


Who? Tim Brosnan

Bought his home in: 1990

Where? Montenotte, Cork

Type of home: 4-bedroom semi-detached

Price in 1990: £50,000

Asking price today: €360,000

'In 2001 we built a side extension which cost us around £50,000 - that was the same price we paid for the house itself just over a decade earlier, if that's not a clear sign of how prices rocketed in a few short years I don't know what is.

I was brought up close-by in St Lukes, so while Montenotte has always been a sought-after address in Cork, we bought the house here because it was close to home.

We married soon before moving in and my late wife Mairéad and I had two daughters who loved growing up here. We're just two kilometres from the city centre so it ticks all boxes.

The house was built around 1933, I believe, and so we had to spend a lot on it at different times. Even installing central heating was something of an ordeal because of the old piping and thick walls.

These days I think some young people have desires which aren't always practical. Like if I lived in a palace I wouldn't want an en-suite bedroom. I've always wondered why someone would want a toilet next to where they sleep but that's just me.

I've a decent sized front and back garden which takes time and effort to maintain but I couldn't imagine living anywhere else now. We bought for life back in 1990, we had no intentions to sell it for a profit and move on as was the case with many during the boom.

There's a great and active local community here with good schools nearby and everything you'd want.

I've worked as a pensions consultant for many years and during the boom time, as I travelled the country, I saw so many new estates built on poor ground. Thankfully ours was built on a height."


Who? Joe and Casandra McCaffrey

Bought his home in: 2005

Where? Terenure, Dublin

Type of home: End of terrace 3-bedroom

Price in 2005: €440,000

Asking price today: €325,000

'Soon after we bought the house another similar one down the street went for €680,000 so we thought we'd picked up a bargain, but when the economy nose-dived and work dried up, we realised that wasn't exactly the case.

Initially all seemed well. We had nice neighbours, it was a lovely area and though space was tight - the third bedroom downstairs wasn't too big - it looked like a shrewd purchase.

When we bought the house we got involved in a bidding war. As well as the price we paid, we had to fork out full stamp duty of €30,000.

I work as a quantity surveyor and when the building bubble burst my employment dried up. I, my wife and oldest child lived in the house until 2009 but then, out of necessity, we decided to move to London to look for work. We rented out the house in Terenure to cover the mortgage but it just about washes its face to this day.

When we came back last year, we rented a house in Churchtown where we now live with our three kids.

We found ourselves in a real property trap but we feel at least we have something which may in time be an economic asset. But holding on to it has been so tough, I know generations in the past say they worked hard in difficult times but I think the amount we're working now to keep our heads above water, with young children aged 10, 6 and 3, has been immense, coupled with the relentless pressure.

We've heard some older couples with larger houses on the outskirts of Dublin are eager to move to something smaller nearer the city so perhaps a swap of sorts might be possible down the line."


'We won't move for the sake of buying so we've parked  the idea for a few years'

Who: Steph Sinnott and Keith Gillen

Status: Renting in Dublin 9

Dream buy: Sandymount

'Before Aoibhe started school, we lived in a two-bedroom apartment in Artane for four years, which wasn't exactly ideal," Steph says. "Keith and I knew we wanted to have more kids, so we started to look around for a bigger place with a decent back garden. The standard of rental properties we viewed was shocking.

Finally, after about a year, we found a great three-bedroom semi-detached house just off Griffith Avenue, where we've been living for the past three years. Back when I graduated in 2005, a lot of my friends were buying apartments, but I decided to go travelling instead. Then in my mid-twenties, I went back to college to become a personal trainer and eventually set up my own business, Baby Body Fit, so buying a house was the last thing on my mind.

Last year, we went to a few mortgage advisors and it was just depressing. Even if you somehow manage to save the huge 20pc deposit, as a self-employed person, the bank makes you jump through hoops to get a mortgage. Now we've decided to park the idea for a few years. People always say, 'You're mad to be renting', that it's dead money. But it's better than being stuck in negative equity like lots of our friends. Ultimately though, we'd love to have our own place. As a family, owning your own home definitely gives you a greater sense of security. At the same time, I don't want to move out to Kildare or Meath - miles away from family and friends - just for the sake of buying. If money was no object, I'd love to have our own place in Sandymount, where my dad's from. Hopefully, the fact that we were able to pay the rent and bills will stand to us in the future when we're in a better position to buy''.

Steph Sinnott is founder of in conversation with Deirdre Reynolds

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