MY wife and I have been trying to buy a house now for a year. We are in our thirties, have a very healthy combined salary and great credit rating. We are renting in Cork city and would like to move to the countryside.
We had no issue securing a mortgage, we expected this would be the most difficult step... how wrong we were! There are essentially four options available to us (and every other first-time buyer).
1. New Houses: These are essentially non-existent at present. Any that do come to market are bought by private investment groups at prices we cannot compete with.
2. Older Properties in Need of Repair: A first time buyer simply cannot buy these, as banks (including those the taxpayer has large stakes in) want properties 100% turnkey.
3. 100% Turnkey Properties: This is now the market the vast majority of first-time buyers are finding themselves in. Competition is strong, to say the least. According to auctioneers in the West Cork area, 80-90% of houses are sold for cash to English holiday- makers. Again, we simply cannot compete.
4. Self-Builds: It is essentially impossible to get planning permission anywhere in Cork, indeed this is a nationwide problem. Even people who have lived in a rural areas their whole lives are having difficulty getting planning on family land. The Cork County Council planning map shows essentially the entire county is off-limits for building, to ‘outsiders’, with the exception of a small area in the north- west of the county. A recent Landmark European Court ruling challenged this process as illegal and discriminatory as it contradicts both the Irish constitution and European law with regards to freedom of movement. They have instructed you, Minister to explain yourself to them, have you? Interestingly, these laws appeared once your generation had already secured a property, and in the cases of many ministers... a second property.
In the past year, we have been Sale Agreed on a number of properties (with cash deposits down) only to be outbid by a mysterious “cash buyer” before contracts were signed.
I was shocked to discover this is perfectly legal. It is known as gazumping and is illegal in many European countries.
We have been the highest bidders on numerous properties, only to be outbid at the last moment, again by a mysterious “cash buyer”. We have no real idea of what is happening here as the auctioneers will not tell us. The lack of transparency with regards to auctioneers and the bidding process again shocked us. The industry is in desperate need of regulation.
A number of recent developments have boiled our blood and the blood of any other first time buyer, such as the fact it is now painfully obvious that the market has been designed to attract this type of foreign investments for the last ten years, with tax breaks and incentives for investment funds.
Crocodile tears now from FFG are unlikely to work.
Plus, the Government recently announced they would PAY 20% of the public work force to move to rural areas! At a time when the government has pledged to bridge the divide between the public and private sectors, this will do the exact opposite.
Should the government incentivise public workers to move to the country, it will further reduce housing stock and increase prices.
Is now really the best time to announce this? Why not invest this money in speeding up the provision of decent internet instead?
Then we had the recent announcement regarding ‘affordable’ housing. How was it determined that these prices are ‘affordable’?
Why, Minister, did you ignore the Central Bank, Department of Public Expenditure and Reform and ERSI that this would likely drive property prices higher still?
We also had the news that NAMA, which is currently sitting on 747 hectares of land, has cleared its debts and is turning a profit. Meanwhile, it is drip feeding expensive properties onto the market and not investing in or providing any affordable housing stock for Irish taxpayers. It is dfficult to understand why the government does not instruct it to start building affordable units or selling this land at affordable rates to first time buyers.
Meanwhile, Irish people continue to pay some of the highest mortgage interest rates in Europe.
All the above shows the current and preceding governments are out of touch with reality.
Here are my suggestions to assist you:
1. Declare a national housing emergency.
2. Instruct NAMA to begin developing affordable housing, and to sell lands at reasonable prices for self-builds.
3. Instruct local councils to rezone land for building.
4. Scrap your “affordable housing” scheme.
5. Scrap ‘local only’ planning laws that Europe have told you are illegal. Remember, we are talking about areas that have some of the lowest population densities in Europe.
6. Remove tax breaks/ incentives for investment companies.
7. Limit the sale of new properties, 1 per person/ family.
8. Legislate that 70% of all new housing stock go to first time buyers of any nationality domiciled in Ireland until the crisis is over.
9. Scrap first time buyers’ grant on new homes, as data suggests this has in fact driven prices up. Replace with a more suitable scheme.
10. Index rent rises to inflation, not to suit investment funds.
11. Ban the purchase of second houses and holiday homes until crisis has been resolved.
12. Identify high risk areas (such as West Cork) and ban the sale of properties to persons not domiciled in the country for the past 5 years. In cases where a person whether Irish or another nationality, will genuinely, permanently move here, waive this.
13. Introduce a new means for evaluating property prices which caps prices.
14. Introduce an online logging system where bidders register and are identified with aliases only (for GDPR) purposes.
15. Regulate auctioneers.
16. Introduce legislation that once a cash deposit is put on a property under agreement with the vendor, that the house is secured for the buyer, with conditions obviously.
17. Use taxpayers’ bank shares to lower mortgage interest rates and allow for the purchase of older properties in need of renovation.
Finally minister, I advise you (perhaps just for a day) immerse yourself among people like ourselves to familiarise yourself with reality.
I ask you to do this so younger people like us can achieve what your generation did so easily; purchase a home in which to raise a family.
If things are this bleak for decent earners like us I can only imagine how difficult it is for those on lower incomes than us.
Yours Sincerely, but not so much, respectfully.