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Saturday 23 September 2023 Dublin: 15°C
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# property ladder
'Relationship status should not define your ability to own a home, but it does'
Single people say trying to buy a home is even more difficult for them than for couples – and that’s saying something.

BUYING A HOUSE is currently out of reach for many people in Ireland due to a lack of supply and increasing prices.

As difficult as the process can be for couples, people who are trying to buy a home by themselves face an even bigger challenge.

Last week, The Journal spoke to a number of people, mainly those house-hunting with a partner, trying to get a foot on the property ladder.

They raised concerns about the impact the pandemic is having on house prices, and have called for viewings to be done in a Covid-safe manner before a property gets to the ‘sale agreed’ stage.

Today, we’re focusing on the struggles faced by people who are applying for a mortgage or seeking to buy a home by themselves.

Even when they’re in a secure job and on an above average salary, the fact that they’re not seeking to buy with a partner, puts them at a big disadvantage.

The average price paid for a home in Dublin in the 12 months to January 2020 was just over €453,000 – nine times the average full-time salary.

Mary, who preferred not to give her surname, got mortgage approval earlier this year. She said this seemed like “the main hurdle to overcome” but when the amount you’re approved for “isn’t matching up with house prices, there is this enormous gap that you’ve no way of filling”.

“It feels like there’s almost no point in having the approval, unless you happen to have access to inherited wealth to bridge that gap.”

Mary works in the NGO sector and is on an “above average” salary but, because she’s trying to buy a house on her own her mortgage approval is for €203,000 – with her deposit, that’s a budget of €225,000.

She said she is “priced out of 95% of houses in Dublin”, so can’t imagine what it’s like for single people on a lower salary.

“Being limited to borrowing 3.5 times your income means that most single buyers are entirely locked out,” she told The Journal.

“If I was buying with someone on a similar salary, our budget would be around €380,000, but on one income it is €225,000 – so it’s not exactly any sort of level playing field.

“People buying in couples have an advantage over me as they generally have a bigger budget so I am being outbid by amounts I can’t even consider.

“Relationship status should not define your ability to own a home, nor should family wealth, but it does.”

Mary said the few houses that are available within her budget “go up by €20,000 to €30,000 overnight and I am out of the running immediately”, adding, “most of them also need €50,000 to €100,000 of renovation work”.

“It is literally impossible for me to follow the wisdom of looking at places 20% below my budget to allow me to bid upwards, as those houses don’t exist in Dublin.

“I started out hopeful that I could buy in Crumlin or Drimnagh as an area I lived in previously but I am priced out of those areas by at least €50,000 to €70,000. Now I am looking in Ballyfermot and the same thing is happening there.”

Mary said the only way to afford a house as a single buyer is to be on a salary of over €70,000 or to have a family who can give or loan you tens of thousands of euro.

“If you have neither of those things, you are locked out. It is hard for me and I have a decent enough income, it is literally impossible for others.”

Buyers can apply for an exemption with their bank in an attempt to get access to a higher budget, but it can be difficult to get this type of approval.

Mary was renting until January – paying €830 a month – but has now moved home to save money, something she knows many people can’t do.

She said the government needs to do more to help people, in particular those not in couples, to afford homes.

She said the Help to Buy (HTB) scheme for first-time property buyers – where people can get up to €30,000 to build or buy a new now, once they meet a set of conditions – is “not really practical as it doesn’t address affordability”.

“The scheme only applies to new builds, which isn’t much use in a lot of Dublin because there is actually no building happening.”

People looking to buy a house at present are generally told to wait a while longer, at least until pandemic restrictions ease in the next few months.

However, many people have a relatively short time frame in which to buy.

I’m 40, I can only get a 25-year mortgage. Every year that I wait beyond this is a year where my repayments have to be condensed, so that’s another consideration.

“You’re told to just wait, that might be easy enough to do if you’re in your early 30s, it’s not as easy to do when you’re 40. Hopefully things will get easier after the restriction ease, but I’m not in a position to put this on the long finger.

“And I don’t really see the situation getting much better because supply is still going to be an issue in a year or two years’ time.”

Mortgage approval typically lasts six months so, in the likely event she will not have found a house by the summer, Mary will have to reapply for approval.

“You spend so much of your adult life waiting for this, to buy a house. You pay your rent every month and you dream about getting out of this horrible rental market,” she said.

“You put all this work into saving and getting your finances in order and clearing your desk and doing everything right, having all your ducks in a row, and then you get here and you realise you can’t afford anything. I just don’t see that being different in six months.

“All I want is a two-bed house somewhere that is not miles away from my friends and community, it is not much but it feels increasingly out of reach.”

A €140,000 mortgage

Maura* has a secure job in healthcare and is on a salary of €41,000. She would also like to buy a house in Dublin, but this currently seems impossible.

She hasn’t yet applied for a mortgage but has made some inquiries with her bank and a mortgage broker. She has been advised that her mortgage would be for a maximum of €140,000.

“Given my salary, my mortgage will be €140,000, which is no mortgage at all given current house prices,” she told The Journal.

Maura said she “naively” thought that she might be able to find a one-bedroom apartment with her budget.

I very stupidly and naively thought that, as a single person with no dependents, because I’d be looking for a much smaller space, I actually thought things would be a little bit more flexible for me. I thought that would be kind of an advantage but, but that was very silly.

She said, through initial inquiries, she has learned “the message is quite clear that, unless you’re on unless you’re on a salary which is €100,000, there’s absolutely no hope of living by yourself”.

shutterstock_226603810 Shutterstock / David Soanes Dublin city (file photo) Shutterstock / David Soanes / David Soanes

Maura said she is fortunate to be able to get a deposit from her family but even with this her budget is very low.

“The first hurdle was trying to save for a deposit in the first place, especially when you’re paying rent in Dublin, so it’s just that constant cycle of paying rent and trying to save.

“I’m happy to say that I would be inheriting my deposit from my family, there’s absolutely no way I could have saved for that myself on the rent that I pay in Dublin. I don’t think that’s something that is talked about enough like – the amount of help that people need, but people do rely on their parents. How shameful is that, but it’s the truth.”

Maura said her salary “isn’t going to change hugely” and she is “never going to be on 100 grand, not in healthcare”.

“I can make peace with that, but what I’m struggling with now is a message that I’m getting from lenders. Even though it’s not explicit, the message I’m getting from mortgage brokers and banks is that really it comes back to the traditional social unit.

I have been told that banks in general and the lenders in general are conservative and they prefer to lend to married couples.

Maura has considered trying to get a mortgage with one or more friends who are also looking to buy by themselves.

“I suppose I didn’t think there’d be as much of a barrier to buying with another person who isn’t your spouse. My understanding is that generally lenders are less reluctant to lend unless it’s to a more traditional unit.

“My understanding is that if you’re married at least a lot of the paperwork, the nuts and bolts of it, are in place if things fall apart.

“If a person is buying with a friend, lenders seem basically more reluctant to give mortgage approval, I think based on the assumption that friendships can fall apart”, she said, jokingly adding: “Obviously marriages can never fall apart.”

‘Out of reach for single parents’

Ann-Marie, who lives in the Douglas area of Cork, got mortgage approval during the week.

She has put a deposit down on a house priced at €275,000, based on plans. The house won’t be ready for at least a year but her mortgage approval will run out this summer, meaning she will have to reapply.

Despite this, she felt she couldn’t pass up the opportunity of a house just slightly over her budget, about a 30-minute drive from where she currently lives.

Ann-Marie, who also preferred not to give her surname, is eligible for the Help-to-Buy Scheme and will also borrow money from her family.

“I applied for the Help-to-Buy scheme and I did get that because the house is new. So, €27,500 will come from that. I got a mortgage of €227,000. And then, I have a gift from my family of €16,000. So all of that combined, just leaves me a few bob short which I’ll try to save.

“I can’t pass up this Help-to-Buy scheme because I’ve paid enough tax over the last 20 years to get nearly the maximum amount.

“The difficulty here for me is – yes, it’s great that I have my mortgage approved – but because the house is a year away and mortgage approval only lasts six months, I’ll have to get an extension but if my circumstances change, if I get sick and am not able to work or, if I could lose my job, anything could happen.”

Ann-Marie said the government should consider extending the HTB scheme to include second-hand homes.

“If I was able to get some sort of a grant to buy a second-hand home, I could probably stay in the same area. If there was some sort of incentive for first-time buyers buying second-hand homes I think that will be helpful.”

shutterstock_1916515787 Shutterstock / Dario Lucci Cork city (file photo) Shutterstock / Dario Lucci / Dario Lucci

Ann-Marie is a single mother and said saving has been difficult because of rent and other bills, but she has been trying to put about €200 away every month for some time now.

Over the past decade, she has paid about €120,000 in rent.

“Because you’re paying massive rent and all the bills on your own, and having a child, it’s extremely difficult to save.”

Her daughter is now 17 years old, so Ann-Marie said she can move a bit further away from her daughter’s school and friends – something she didn’t want to do until her daughter was older.

Ann-Marie views herself as lucky to have reached this position. Many of the other single parents she knows fear they will never own their own home, despite having permanent jobs.

Any single parents that are friends of mine, one I say I just got mortgage approval, they say ‘Oh my god that’s fantastic, but I’ll never get there’.

“Maybe their salary is slightly lower, or maybe they just have no option to save even €200 a month.

“It’s just unbelievable that somebody with a guaranteed, pretty nice salary isn’t able to get themselves on the property ladder.

“The main two reasons I want to buy a home is, I want to have somewhere that I can close the door and not worry that somebody is going to sell the house under me, and I want to somewhere to live when I’m old and tired.

“Second of all, I do want to have something to leave to my daughter. I don’t want to be up to her to have to house me when I’m old. I’m lucky that I am able to buy as a single-parent because it’s so hard for us to do it.”

‘We are the cautionary tale’

Sheila* is a 41-year-old artist and dental nurse based in Co Wicklow. Fourteen years ago, she bought a house with her sister “as an investment”.

She told The Journal: “I probably earned a better salary then than I do now, so when my sister asked me to get a mortgage with her for a house in Dublin, as an investment, it sounded like a great idea. We were the cautionary tale.

“She and I earned average money but the bank gave us 90% of the mortgage cost. The house sold to us for €400,000 and it seemed like peanuts at the time. We were so young, we thought we were doing the right thing because everyone we heard on the news kept going on about a ‘soft landing’ and we thought we’d never own a home.

“It was a big mistake, for me anyway. My sister got married and has lived in the home since, but as they’d had a decade of job losses, three-day weeks, maternity leave with the arrival of two children, they couldn’t find a clear run where the bank would even entertain letting me off the mortgage.

“Even though in all that time, they never missed one payment, not one. It seems so ludicrous, that she and her husband have clearly paid the bills in all that time, I’m not earning any more now, and yet they won’t let me off and he onto the mortgage.”

Sheila said it has been “a long road, where I was left with no options but to rent and try to save”.

“As a single person, that is so depressing. This year, thankfully, I’m getting off the mortgage, but I feel I’ve lost a decade. I’ve saved as much as possible but now that I’m a second-time buyer with no cash or capital, I’m in a worse position than the first-time buyers.

“My sister and husband have saved a bit to give me and help me with my deposit, but it’s not enough. I work two careers, one in a clinic and I also work as an artist. Covid has impacted both but I’m still earning, at least.”

Sheila is working with a broker now to get approval but because a person can only get a mortgage worth 3.5 times their salary, “no matter where I look for houses, they are out of my reach”.

“Even the houses that are ‘falling apart but liveable’, the ones where you’d really need lots of money to renovate, but maybe could paint them up and live in them for a few years, are going up all the time.

“You contact agents, they only sometimes respond, they tell you a price but with Dublin prices, you can expect about 20% of an increase on that price. It is so dispiriting.

“Even apartments, always offered as the solution for ‘single-person living’, are out of my reach. I just don’t get it. It’s hard enough as a couple, by all accounts, so what are the chances for single people? No one is fighting our corner.”

‘The rampant greed of the Celtic Tiger’

Ellen* (43) works with an NGO and lives in Meath. She lived abroad for 15 years – spending a decade in Australia and five years in London.

“It was a great 15 years but I worked in different areas sporadically and wouldn’t have earned enough to invest in any property at that time,” she said.

“Much of the conversation among my Aussie and London friends was the excessive increase in house prices. I watched as so many people I knew, first-time buyers really struggled to buy homes. I always knew, even though I had become an Australian citizen, that I wanted to come home to work and live in Ireland.

“That’s what you do when you want to be near family, in the end. No amount of sunshine and good living can replace being near your loved ones. I watched in horror as the Celtic Tiger took hold in my home country and made the idea of buying a home no more than a dream for most.”

Ellen said, “after the Tiger fell, I hoped maybe things would become more affordable and I came home in 2018, at the tail end of the downturn, I guess, but the height of the housing crisis”.

“I was hoping to start again with life in Dublin. I’m from Meath and was lucky I could move home to my parents, at least, to get myself organised.”

Ellen said she was “disgusted by how prohibitive buying a home would be for me as a single earner”.

“The rampant greed of the Celtic Tiger was casting a long and depressing shadow over people of my generation as well as young families. It really is a terrible thing to see.

“I kept hearing about ‘the new Central Bank rules’, meaning I had to have my deposit saved (I didn’t, but at least living at home I was working hard to save) and could only borrow 3.5 times my income.

“I understand why the Central Bank brought this in, to stop the wild lending of the Tiger years, but really it has just served to persecute so many people who work long hours for ‘average, but decent’ wages. What kind of system have we got here if those who work hard and earn what looks ok on paper cannot even buy a home? The mind boggles.”

Ellen said if paying “over the odds” for a home in Sydney, Melbourne, Perth or London, “the trade-off seems just a teeny bit understandable”.

“With these cities, the standard of living is so high, the choices on your doorstep are many, be it art and culture, good transport systems, surfing, beaches, good food, the buzz of a well-planned and run city. I have to be honest, what exactly are we paying over-the-odds money to live in Dublin?

“Don’t get me wrong, I love Dublin, but it’s not top billing globally for transport, quality of life, affordability. It’s not Paris or Rome! And yet, the cost for any single person like me to live in this city is too great.”

shutterstock_1787318480 Shutterstock / Willy Barton File photo Shutterstock / Willy Barton / Willy Barton

Ellen said she had resigned herself to probably never owning a home in Dublin “having ‘run the numbers’ several times, so I had settled somewhat at home, getting on with life”.

The Covid-19 pandemic hit and her concern for the welfare of her parents grew.

“They’re both in their late 70s and healthy, but were cocooning. We worked hard to keep separate from each other, but that’s not ideal in the long-term, so we started to talk about imaginative ways to deal with this.

“Could we renovate the garage? Looking at that option, and getting advice, it seemed it would be a nightmare planning-wise and cost-wise. And the upheaval would add to their stress. It seems in this country that once you even consider any kind of renovation you’re talking ‘big money’.”

Ellen said a friend of hers, who was “working from home with children in tow” bought a cabin for her garden in Kildare, using it as an office for her and her husband.

“I set about searching all sorts of ‘modular housing’ options. If you look, you’ll find some great offerings now, some are beautiful homes built from storage containers, others from wood, but all are built in no time and affordable.

“So with my parents’ and siblings’ blessing, I built a cabin in the corner of the garden. It’s compliant with planning, was built in two weeks and I love it. It means my parents and I can live apart but I can shop for them.”

Ellen said it’s not the home she imagined living in, but “I’m not in debt, I don’t have a €400,000 mortgage to live in Dublin, and I can get on with my life.

“Is it my ideal life plan, to live like this? Probably not. But there’s a housing crisis, and a global pandemic, so I’m good. Am I happy that I can sleep at night not worrying about debilitating mortgage debt? Hell, yes.

“I see so many politicians arguing in this country about what’s wrong, why homes aren’t being built, this policy, that policy, but while they’re holding the whole thing up, people like me are renting or living at home (if they’re lucky to have family to allow it), many will never own a home. Young kids and families are homeless and living in hotels. It would make your stomach turn.”

Ellen said, instead of fighting about policy, politicians should “get inventive and encourage or facilitate the planning laws around cabins and modular homes”.

“Relax your planning laws in favour of invention, good design, sustainability.

“You hear a lot that the only people who can afford homes are those with wealthy parents. My folks didn’t have money, but they did have space, so why not offer incentives for this kind of solution, at least in the short term? Has no one in government any imagination? Think outside the tiny box we’ve all been forced to live in.”

*Names have been changed at the request of the interviewees

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