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Clare TD says new policy needed as rents skyrocket


TD says more creative solutions required to address housing shortage

WITH average rents in Clare now standing at €1,061 a month, prices are causing severe financial difficulties for couples, families and individuals around Clare.

Prices have doubled since the recession, and Clare TD Michael McNamara said there is a need to make sure all existing houses are used and more are built.

The Scariff man said that local authorities need to get houses back into use quickly when tenants, leave, with some Councils allowing long gaps.

Also, he said that in Clare derelict units must be restored.

“It could be put back into use quickly if either schemes were in place to incentivise private landlords or if the Council were to use their powers under the Derelict Sites Act.

“It’s something that could be done quickly, there are structures there, and almost all of them are pre 1963 so enjoy planning permission, it’s a matter of repairing them, compulsorily acquiring them or acquiring them by agreement with the owner now they’ve fallen into dereliction and they have no immediate plan for them.”

He says that too many County and City Councils didn’t take advantage of options to take on housing during the recession.

“NAMA contacted all the local authorities about ghost estates and in fairness to Clare County Council they took on a couple of them but by and large local authorities around the country ran a
mile from it.”

Deputy McNamara also said that local authorities buying existing houses rather than building new ones, while delivering a short term saving, meant that the amount of units did not increase.

“Instead of building housing stock, local authorities went in and competed with first time buyers, to buy existing housing stock. It didn’t result in more housing being built and it was a very short term approach.

“Most people would agree that even still it’s cheaper to buy a house than to build one. There was a short term saving to the local authority, they acquired houses more cheaply than they could build them, but the housing stock wasn’t increased because of that policy. I’m not laying it all on them, Clare County Council did build houses.”

He said apprentices have seen training delayed due to Covid, and that will hit the sector’s capacity to deliver the new houses that are drastically required.

Fine Gael’s Joe Carey agreed that a tightening of supply has led to the surge in rental prices. “There is very limited availability of houses around the county, particularly in urban areas. That has led to rents increasing.”

He said that there are plans to increase production and they must be delivered upon.

“It’s really about getting more houses built. The Housing For All plan sets out targets and I think every effort must be made by Government to implement that plan in full, get social and private houses built to drive down rents.”

Deputy Carey recently put a parliamentary question to finance minister Paschal Donohoe asking that he instruct banks that people applying for a mortgage have their history of paying rent considered as evidence of their capacity to repay a mortgage. 

Responding, the Minister said, “The Central Bank has advised that in general, lenders do take rental payments into account when making their affordability assessment as part of regular underwriting process, to assess borrowers’ ability to repay a mortgage. 

“However, there is no Central Bank guidance or guidelines to lenders specifically in relation to their consideration of rent being paid by mortgage applicants in the context of their mortgage applications.

“This is for each bank to determine and to set out in its credit policy and it is therefore not an issue that I can instruct the Central Bank or lenders on.

“It is important to note that a mortgage is the largest liability that most households will take on in their lifetime. It comes with less flexibility than a rental contract, leaving borrowers more exposed to shocks to incomes, house prices and interest rates in the future. 

“The ability to make regular repayments – evidenced through rental payments – does not substitute for the protection for borrowers in having a deposit. A mortgage deposit acts as a cushion of housing equity, and can help households to absorb house price falls without the borrower falling into negative equity.

“It is worth noting that the Central Bank is carrying out a review of the framework for the mortgage measures throughout 2021 and 2022, in parallel to its regular annual reviews of the calibration of the measures to ensure they continue to remain fit for purpose.”

About Owen Ryan

Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked for a number of other regional titles in Limerick, Galway and Cork.