County Kildare’s private housing tenants have to face a bigger hurdle than most if they want to get a mortgage to buy a property similar to they one they are renting.
Kildare tenants are paying relatively more for rental properties, as opposed to mortgages, than those in almost every other county.
A Leader analysis of recent Daft.ie figures for three-bed homes found that those renting in Kildare, as opposed to paying mortgages for similar properties, are forking out more cash than anybody else apart, from those living in five districts in Dublin.
Daft.ie recently provided both price/current mortgage and rental figures for a number of different types of property.
The Leader analysis found that, in the State as a whole, only five Dublin postal districts had a larger cash difference between the average rent for a three-bed house and a 4.6% interest mortgage monthly payment for a similar three-bedroom property.
In County Kildare, householders are paying €321 per month more to rent a property than hold a mortgage on it, compared to a national difference of €174.
On average, one would pay €675 for a mortgage at current prices/interest rates.
The average renter in Kildare is paying 48% more than the mortgage holder (but that does not account for the owner’s maintenance costs).
Even if the mortgage rate were to rise by two percentage points, the renter would be still paying more than than the mortgage payer, by around 18%.
Commenting on the figure, Kildare County Cllr Suzanne Doyle said she believed the credit crunch was responsible.
She said that even though people can afford to buy, they are not being given the credit.
“A negligible number of people can meet the criteria even for County Council loans,” said Cllr. Doyle, who added that two bed-homes are badly needed.
The Leader found a three bedroom house in Pairc Mhuire, Newbridge, being advertised to rent at €1,100 per month.
The average price of sales in the estate going back to 2015 (with the exception of one property sold at €50,000), is €127,000, the highest being €180,000.
If one paid €180,000 for a house, after saving a 10% deposit of €18,000, the monthly cost of the €162,000 4.6% mortgage would be €830.48 per month over 30 years or €1,033.66 over 20 years.
The monthly rent is 32% more than the 30% mortgage rate.
Cllr Doyle said: “The consequences of current credit restrictions means that those on limited means are being excluded from the house purchase market at a time when it is offering best value for money, while those with resources are in a position to cash in on the market and in turn will make significant profits on these investments when credit is released into market, which will start the whole crazy cycle again.”
She said the decoupling of speculative investment in housing from the purchase of housing is a necessity, and might be an option for the State, given the commodification of the housing market.