Talking Property

Renting is nearly as stressful as buying, says ISABEL MORTON

SO “RENTING is the new buying”? Well, it is, probably, but only because people have little choice in the matter. They have to live somewhere and, as the banks are still not lending, renting is the only option.

Perhaps Germany is refusing to let Irish banks lend to potential property purchasers, because it wants to wean us off owning our own homes and force us to live like its citizens, frugally, within budget and in rented apartments?

But, as most Irish people still have issues regarding landlords and evictions, owning their own home is, unbelievably, still high on their list of priorities.

And, when you look back on all the madness of the boom times, wasn’t it precisely because it’s in our DNA to want to own the roof over our own heads, that so many, so readily, took to investing in property above all else?

I mean, its not as if we were all stockpiling gold bars. No. Only property.

In those heady days, only the young, or those in receipt of state assistance (and some fell into both categories) were exempt, otherwise it was presumed that you would be a property investor of some description.

And, in the early days, when the nation was new to the landlord game, the conversation everywhere, from smart dining tables to construction site canteens, centred on the difficulties of dealing with tenants and ongoing maintenance issues.

But eventually, investment property became so much the norm, that it was considered somewhat passe to discuss such matters, as some were lucky enough to employ management companies to deal with their “portfolios”, while others ticked along gently looking after “the rentals”.

Then, it all went pear-shaped and no one dared mention that they owned their own home, never mind any “investment” properties. Apart from the fact that these were now liabilities, their values having been decimated, embarrassingly, they were no longer even “washing their faces”, as rents had also nosedived.

Suddenly, the balance shifted dramatically and the see-saw favoured the tenants, who, quite understandably, took full advantage of their position; making low-level offers and high-level demands.

Landlords were only just getting used to their subservient role and the new regime; (jumping to attention if their tenants called), when surprisingly, the balance of power shifted yet again, as it became clear that well-located family homes in the capital were in very short supply.

So now, sought-after areas such as Dublin 4, 6 and South County Dublin are seeing rent increases, as competition grows for the few properties that come on the rental market and, as one letting agent said, “anything decent is gone in a flash”.

They blame Nama for the shortage of both rental and sales properties, but letting agents can’t comment publicly, as Nama is their biggest client and they can’t afford to lose the business.

And, you can hardly blame them for staying quiet, as Nama is quietly running the show.

So, who is renting now and why?

Well, apart from those who will never earn enough to be considered for a mortgage, there are students, young people and immigrants, who will always need to rent.

But there are also new breeds of tenants, such as those who have already been burned by their lending institutions, have had everything repossessed and will never be given (nor bother requesting) another loan again in their lifetime.

And there’s the cautious few, who have been sitting on the property fence for so long now that they have entirely lost their nerve, so busy are they, chasing the bottom of the market.

There are also older couples, who, having refinanced their home to help an adult child get on the property ladder, now find themselves unable to sell, as they are in negative equity and have cash-flow problems, so are forced to make up the difference by letting their own home and renting somewhere smaller and less salubrious.

Then there are separated couples, who, having sold their marital home for less than half of what they originally paid, can’t even clear their debts, let alone consider buying small individual homes, and so must go back to renting.

And even downsizers who have managed to sell their family homes are often forced to rent for months, whilst waiting for something suitable to come on the market.

Ex-pats returning to this country with cash, meanwhile, find that, not only can they not find somewhere to buy but they can’t even find somewhere to rent in the meantime.

Indeed, renting may well be the new buying – it’s certainly becoming as stressful and difficult as buying ever was.

* Isabel Morton is a property consultant