Wednesday 18 September 2019

Eilis O'Hanlon: 'Owning your own home is a rite of passage, and too many are denied it'

The souring of Ireland's long love affair with property is more than just a personal tragedy for those shut out from home ownership, writes Eilis O'Hanlon

'There can be nothing more depressing than making painful sacrifices, only to discover that it’s still not enough to get the tiniest toehold on the property ladder.' Stock photo: Joe Giddens/PA
'There can be nothing more depressing than making painful sacrifices, only to discover that it’s still not enough to get the tiniest toehold on the property ladder.' Stock photo: Joe Giddens/PA

Remember so-called property porn? It used to be all the rage to drool over glossy newspaper supplements featuring voluptuous and generously proportioned houses for sale in the pricier end of town.

These days, people aren't that fussy. They just want a house. Any house. That's enough to get them excited. It's as if, in housing terms, they've stopped fantasising about George Clooney or Pamela Anderson, depending on their persuasion, and settled for Mr or Ms Average instead. The cooling of ardour is symptomatic of how Ireland's relationship with home ownership has changed.

There are some positive aspects to this disillusionment. We stopped seeing houses as investments, and returned to the old-fashioned idea, crazy as it might have seemed in the grip of the boom, that they're homes first and foremost. That was a necessary recalibration. The downside is that this realism has been forced on the younger generation by a realisation that prices are still way beyond their reach.

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Many now believe that even Mr or Ms Average is out of their league, and have stopped making an effort. Last week's Sunday Independent poll found that many have stopped saving for the deposit for a mortgage at all. They just don't see the point. Home ownership has become an unattainable dream.

There can be nothing more depressing than making painful sacrifices, only to discover that it's still not enough to get the tiniest toehold on the property ladder.

For individuals affected, that's a tragedy. For Irish society, it's a ticking time bomb. Renting in one's 20s is all very well. It could even be said to suit the fluid, open-ended nature of life in those years.

Beyond that, families need to put down roots, not least because no one over 30 has the energy for moving on every few years. It's too much upheaval. The insecurity involved in renting multiplies with each passing decade. Finding the money for rent every month on a pension must be least fun of all.

Central Bank lending guidelines, designed to stop people borrowing many multiples of their income to buy houses they can't strictly afford, have worked in the sense of putting a lid on rampaging house price inflation; but the effect on morale has been striking. For the first time since these consumer sentiment surveys began in 2012, last week's poll found more negativity than positivity about whether it's a good time to buy a house.

Only 5pc agree "strongly" with that statement, whilst nearly 58pc believe banks aren't doing enough to help customers get a mortgage. Last week's figures, showing house prices in June rising by their slowest rate in six years, can't have come as a surprise.

This is another peculiarity of Ireland's ambivalent on/off relationship with property. Any strong rise in house prices is invariably presented as a good news story, because it represents recovery, even as each rise puts property ownership further out of reach of those on middle incomes.

By the same token, any slowdown is portrayed as a "collapse", with all the disastrous connotations of the word, though it may be the only way for many who don't own homes to catch up with those who do. That's not a contradiction, so much as a reflection of complexity. If house prices were to plummet, as they did in recent memory, it would be because the economy had tanked again, and that wouldn't necessarily make houses more affordable to anyone except investors, whilst the equanimity of homeowners who bought when prices were high, would be shattered by the fear that their life savings were about to go down the drain. Given recent experience, it's a wonder that confidence about home ownership isn't lower.

Even building more houses may not be the answer. A Central Statistics Office study a few years ago showed that it didn't matter how many, or few houses, had been built since 1975, property prices and rents never got any more affordable. It all leads to a feeling that housing is another of those things in life which are destined to remain out of one's control.

It's not only in Ireland. Nearly a quarter of British people now say they're not interested in owning their own home, and one in 10 so-called millennials who do own property in the UK actually say they wish they'd spent the money on something else. It may explain why a growing number of young people of that generation still live with their parents. That's not good for either party's mental health.

Whether they rent or live at home, the experience of inhabiting a space owned by someone else, and always being there on their terms, makes people feel powerless, a sentiment that is unlikely to improve as they go further in life without ever reaching the point at which they can afford a house.

Likewise, never taking on the adult responsibility that comes from owning a home holds them back in other ways. The experience of renting is some preparation, but it's still nowhere near as great, or as pivotal to coming of age and leaving extended adolescence behind, as paying a mortgage every month.

The young are meant to be given a hand up, and in return, willingly take on the task of being, and raising another generation of, reliable citizens. If society isn't going to offer young people the benefits of adulthood, why should they shoulder its responsibilities? The social contract has to work both ways. That's why the drop in Irish home ownership, once the second highest in the EU, to levels more traditionally associated with continental Europe, does not bode well for social cohesion.

One effect that's already being observed is that young people are having fewer children, meaning that there will not, down the line, be a critical mass of working-age people to pay for and look after a growing elderly population.

Of course, the closer one gets to Dublin, then the more impossible the dream of home ownership becomes; and it would be splendid if - as Fine Gael, with its usual tone deafness, appeared to suggest last week when addressing students priced out of the capital - everyone just bogged off to the sticks and bought a house more commensurate with their earnings.

There's a lot to be said for doing so. The quality of life is much better off the beaten track. But whilst the lion's share of jobs are in the crowded east of the country, it's hardly playing fair to pretend that buying a house three or four or more counties away is a solution to the property nightmare.

Fine Gael isn't putting forward proposals for the major investments in infrastructure that would mean families had the access to well-paid jobs, reliable public transport, good schools and other services to happily escape the gravitational pull of the black hole inside the M50. Energising the regions has been talked about for years, but talk is all it ever stays.

The reason for growing alienation is that those locked out of home ownership, through no fault of their own, feel that no one is on their side, and they're not wrong.

The Irish may be too civil to ever rise up against the property barons, however much the system leaves them alone and exposed to a market that's stacked cruelly against them, but they'll stop caring, or feeling they have a stake in the general good. The centre will hold in Ireland, but it will be a diminished and more anxious place.

Sunday Independent

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