A NEW survey has revealed a huge disparity between rental and mortgage payments on an average Clare house.
People looking to rent a house are likely to spend €331 more on accommodation than someone who buys an equivalent property, new research shows.
According to Moneysherpa.ie a house valued at just under €220,000 in Clare means monthly rent payments of €1,087 a month, compared to a mortgage of €756.
More starkly, the difference between fully paying a 30-year mortgage and renting for that period comes to over €119,000.
Commenting on the analysis Mark Coan of moneysherpa.ie said the current lending rules need to be revisited.
“This analysis raises some significant questions about the current Central Bank lending rules, which are in effect creating a chasm between those who can afford property and those that can not.
“Those that can meet the current lending rules, will pay over €100,000 less to live in their home for 30 years and create an asset that they can pass onto the next generation.
“Those that can’t, even though they are paying a monthly rent that would be more than their mortgage repayments, are €100,000 worse off and will accumulate no assets after paying 30 years of rent.
“With fixed mortgage rates now available for 30 years there is less risk of current renters defaulting on their mortgage than on their rapidly rising rents. The Central Bank lending rules have to change and change soon to reflect that new reality.”
The Celtic Tiger years saw very lax policies on lending, which fuelled a huge and ill-fated boom, but Mr Coan said that some relaxation now won’t have the same effect.
“The idea that relaxing the rules will inflate housing costs further is misguided; housing cost inflation is due to lack of supply and is already here in the form of rising rents. Relaxing the rules will simply allow more people to own their own homes and help become financially secure.”
Owen Ryan has been a journalist with the Clare Champion since 2007, having previously worked with a number of other publications in Limerick, Cork and Galway. His first book will be published in December 2024.