Will Rent Pressure Zone reform help fix the housing crisis?
The Government will bring its latest
housing
fix to Cabinet today when it presents new rules on
rent
levels for approval.
Aimed at boosting supply – by encouraging large institutional investors to build and small landlords to stay in the market – the plan primarily concerns rules around
Rent Pressure Zones
(RPZ).
These were established in 2016 – the number of such zones grew over the years – to curb rent rises. Landlords could only raise rents annually, first by 4 per cent and in a subsequent change to the rules, by 2 per cent.
Now landlords of new builds – new houses or apartments – do not have to abide by those caps. Also when a new tenancy begins, a landlord can charge market rent – not the capped RPZ level. Existing tenants will still have 2 per cent rises, for the six-year duration of the lease.
READ MORE
There will also be new measures to prevent landlords evicting existing tenants simply to greatly raise the rent for a new tenancy.
Consumer Affairs Correspondent
Conor Pope
says no one is happy with the new plan, but why?
And does the plan make sense? Economics Correspondent
Eoin Burke-Kennedy
gives his analysis. Will the move really lure capital investment into Ireland's housing market?
Presented by Bernice Harrison. Produced by Declan Conlon.
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Irish Independent
an hour ago
- Irish Independent
Fears new rent controls will lead to landlords hoarding properties
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Irish Independent
an hour ago
- Irish Independent
The Irish Independent's View: RPZ change no quick solution, but leaders had to do something
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Irish Times
2 hours ago
- Irish Times
How to buy a home by yourself
'How in the name of GOD are single people meant to buy their own home?' That's the title of a Reddit thread where solo first-time buyers in Ireland trade war stories and seek advice. Having house-shared for 13 years, 'Michael' has worked his way up the ladder at work and lived like a monk for six years to get mortgage approval in principle. Now he finds himself repeatedly outbid by couples. Other solo buyers pile on with similar woes. READ MORE There's the odd apocryphal tale of the tenant whose landlord took pity and sold to them at a discount, or the lowball bid that was miraculously accepted – but solo buyers can't bank on miracles. If you're buying on your own, here's how to give yourself the best chance. Who are the solo buyers? If you're a solo first time buyer, you're not alone. Almost 30 per cent of first-time buyers are buying on their own, according to Central Bank figures for 2023. 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'A three-bed house used to be the first house 10 years ago, but that's an absolute luxury for the first-time buyer now.' [ Typical price paid for home by first-time buyer up €88,000 on five years ago Opens in new window ] Government schemes Many solo first-time buyers are availing of Government schemes to get them over the line. The Help to Buy scheme gives a refund of up to €30,000 of income tax and deposit interest tax you paid in Ireland over the four years before the year you apply. This can be used to bump up your house deposit, but it applies only to new-build homes valued at up to €500,000. Another option for first-time buyers is the shared equity, or First Home Scheme. This can be used in conjunction with the Help to Buy scheme. Under this scheme, the Government and participating banks pay up to 30 per cent of the cost of your new home (or 20 per cent if you're also getting Help to Buy), in return for a stake in the home. 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In general, the lower your interest rate and the shorter the term, the less you will pay over the lifetime of the mortgage. First-time buyers will have competing priorities, however. If you don't have six months of pristine bank statements, or you are living with parents and can't show a track record of rental payments, new entrant Núa Money might suit you. They look at your net disposable income, not your banking history, to assess eligibility. They look at bonus income more favourably too. They also offer loans to immigrant visa holders who have been here for six months and have passed work probation. Tobin recently worked with a solo buyer with one dependant earning €37,500 who got mortgage approval for €130,000 with Núa Money. Not having to show proven repayment ability worked in their favour. 'They went sale agreed on a doer-upper in Tipperary costing €155,000,' says Tobin. First-time buyer rates for an 80 to 90 per cent loan at 4.85 per cent are higher than other banks and you must fix for three years. If you're a public-sector worker, the Flexi product from ICS enables you to borrow several points further up the salary scale than some other banks. The Flexi is not the most competitive interest rate, but for customers looking for maximum borrowings to get on the ladder, the initial interest rate may not be the biggest factor. For 90 per cent loan to value, rates are 4.4 per cent, fixed for five years. You'll pay interest only for the first two years, then your repayments will jump for the remainder for the fix. Borrowers should note their mortgage will be more expensive in the longer run due to the Flexi product's interest-only start. MoCo and Núa Money will lend two points up the salary scale to public-sector workers while Avant will lend one point higher. PTSB and Bank of Ireland don't offer the feature. AIB will also go three points higher. Timing Government grants are driving solo buyers to new builds, but with that can come some timing issues. If you reserve a new home, go sale agreed and request your loan offer, the offer is valid with most banks for between four and six months. If the build is delayed, the loan offer may expire, meaning you have to reapply with updated salary certs, bank statements and a full assessment of affordability 'We see this with many buying new builds where there is a delay on completion and buyers have to update their mortgage application and reapply,' says Harrison. Keep your bank statements clean until you get the keys. Extra costs Solo buyers must budget for extra costs by themselves too. Stamp duty is 1 per cent of the purchase price, slightly less for a new build. Budget about €3,000 for a €300,000 home. You should be budgeting €3,000 to €3,500 to cover legal fees and outlays, says Harrison. A property survey which the bank will require will cost between €300 and €600 plus VAT, again shop around. Most lenders require you to take out mortgage protection insurance. Budget €20 to €30 a month, depending on your age and health. If you're buying a property in a managed development, you'll have to budget for an annual property management fee.
