I never thought that the day would arrive that the very mention of the European Central Bank would fill me with dread and trepidation. But with the ECB last week signalling yet another increase in interest rates – the eighth in just 18 months – the challenge for young couples of finding a home of their own is now greater than for many years.
For a family purchasing an affordable home for 300,000 euro with a 30-year variable rate mortgage, their monthly repayments will have jumped by more than 300 euro as a result of this string of increases. But for those without a home of their own and struggling to get on the property ladder, these increases have turned a difficult task into one that is close to impossible.Average house prices have trebled nationally and more than quadrupled in Dublin over the past 10 years. While it was once a reasonable aspiration for families on relatively modest incomes to own a home of their own, couples with what were once regarded as good salaries now find that even the most basic homes are simply beyond their means, or located so far from their places of work as to turn commuting into a nightmare.
During a decade of significant economic growth, with record surpluses reported in many of those years, people find it harder than ever to buy a home; we have twice as many people on local authority housing lists than there were ten years ago; and 60,000 are trapped on rent allowances which they will lose if they take up work.
The record of this Government has been largely to abandon couples to the mercies of the housing market. They have presided over a generous regime of tax breaks for investors in residential property, but they abolished the First Time Buyers Grant. Whenever Fianna Fail has been asked to choose between the interests of builders, developers and speculators and the needs of ordinary families, the decision has always been to return the favours shown to the party by the wealthy developers. Has anyone noticed recently how many apartment developments in the city centre are proud to adorn Fianna Fail propaganda on their scaffolding?
The original proposal under Part V of the Planning and Development Act, that would have required 20 per cent of most developments to be reserved for social and affordable housing, was watered down to virtual irrelevance under pressure from developers. Fianna Fail has bent over backwards to facilitate big builders through inappropriate tax breaks and lax planning. The result has been a huge rise in the number of people who cannot afford a house, and many of those who do manage to get the money together being forced to live in isolated communities with no facilities or amenities and long commutes to work.
Much of the debate about housing policy over recent months has focused on stamp duty. This is, of course, a vitally important issue for couples trying to enter the housing market in Dublin and other areas where prices have escalated, and for those who perhaps bought a flat when first married but who are now having to ‘trade up’ following the arrival of children.
But housing is about a lot more than stamp duty. We need to make home ownership a reality for working couples; to significantly increase the volume of social and affordable housing; and to provide greatly enhanced legal protection for homeowners. It is time to end the terrible pressure on families trying to find a home. It is time to give hard working families a break by giving them a real opportunity to buy their own home.
Aodhán Ó Ríordáin is a primary school teacher in the Sheriff Street area of Dublin, a member of the Labour Party, and is currently Dublin’s Deputy Lord Mayor. His column appears every week in Metro Eireann
