OPINION: More renting in Kildare will make us all poorer

"The increase in renting, will reduce our future growth and income"

Leader reporter


Leader reporter



OPINION: More renting in Kildare will make us all poorer

File photo

Searching through the bookshelves, badly organised at the moment, I hasten to confess, I came across some a book of sports essays by the late great Con Houlihan.

His description of a debate about some great topic or other being like arguing over how many angels can fit on top of a pin, struck a chord.

Angel-like arguments about on Brexit and taxes, jobs.

They nearly all boil down to who gets what and when — all of these debate over inequality of incomes and other things, about low tax and high tax.

The angels have been spinning this week.

Most of us thought it would not have been too difficult to figure out how many houses the country has built over the past five years.

We will get to the bottom of that, but how we provide a home for all is a tougher nut to crack.

We should be battling the trend towards renting.

Recent figures the Leader analysed from the 2016 Census show that of the 47,339 homes in county Kildare’s largest 15 urban areas, just 1,669 were built since the 2011 census.

Of the 47,339 properties in the housing stock in these town, 29%, on average, is rented.

You could even call it 30% if you added the houses occupied by those not paying rent.

Of this rented group, 20% were rented from private landlords, 8% from local authorities and 1% from voluntary bodies.

I believe the increase in renting, will reduce our future growth and income.

Economists disagree on such notions.

Some say the difference between renting and buying over a lifetime is almost non-existent. I do not agree.

Ireland would be a much poorer place now if the generation which has bought and fully paid for their houses, had rented.

Instead of spending their money in the local economy, their income would be going to a property owner or perhaps a large corporation.

These will be more likely to transfer their surplus or profits abroad.

At very least, inequality in this sphere will increase.

You can see this dividing line in Kildare.

The Census shows that of the households in the 15 towns, an average of 43% own their own homes with a mortgage.

Another crucial group, representing 25% of all households, own their homes without a loan or mortgage attached to them.

This latter group will have a lot more spending power.

Arguably they have already kept a lot of businesses open over the past nine years.

These spenders are not necessarily all “rich.”

If current trends continue and we become a majority nation of renters — back to the old 19th century famine days — the real cost of housing will balloon.

That means less spending, which will reduce VAT income.

VAT (sales) taxes are as or more important to the State coffers here than income tax.

Commenting on recent figures from the UK Office for National Statistics, the Financial Times found that, in the UK, wealthy households pay a much bigger share of income tax but low-income homes pay a disproportionate amount of indirect taxes, such as VAT and fuel duty.

They found that poor households paid 27% of their disposable (after income tax) income in indirect taxes.

The richest households paid less at 14.4%.