123.ie House & Home Survey finds 43% of people in rented accommodation want to buy their own home but cannot afford to

70% of landlords say they have not increased rent in past year

15% of homeowners would consider an Airbnb letting

80% of tenants expect property prices to rise over next 12 months

 

10th August 2017: Affordability in the property market remains a huge issue for those renting or living with parents. Whilst more than 90% want to purchase their own home, the latest 123.ie House & Home Survey found that 43% of people renting or living with parents could not afford to.

When it comes to buying their own home, the outlook for this cohort is not particularly positive, with 80% expecting house prices to rise over the next 12 months.

The 123.ie House & Home Survey was carried out amongst landlords, homeowners and renters / living with parents and covered a range of issues including rental properties, mortgages, renovations and Rent Pressure Zones.

Recent reports from both Daft.ie and the Residential Tenancies Board show that rents continue to trend upwards. The 123.ie survey identified a similar trend but found that the majority of people living in rented accommodation (60%) saw their rent rise by less than 4% in the past year.

“This figure isn’t actually surprising, given that more than half of those renting are living in a designated Rent Pressure Zone (RPZ), which caps rent increases at 4% each year for three years,” said Padraig O’Neill, Head of Marketing at 123.ie.  

Whilst most tenants incurred relatively modest rent increases, a quarter of tenants reported a rise of more than 10% in the past twelve months. 14% said that their rent had gone up by more than 15%. 

“15% is a huge jump for anyone in the rental market, particularly if trying to save for a deposit,” said Padraig O’Neill. “This could mean an extra €2,700 a year on a rent of €1,500pm, which is a substantial amount of money and could certainly hinder someone’s ability to save for a deposit and a chance to buy their own home.”  

The good news for landlords is that a high proportion of people in rental properties plan to stay where they are, with almost one in three saying they are not planning to move from their current rental property quite simply because they like it.

LANDLORDS, RENT AND NEGATIVE EQUITY

The survey includes the views of landlords, the majority (78%) of whom own between one and three houses. 27% own up to three apartments and fewer than 6% reported ownership of more than four rental properties.

70% of landlords responding to the 123.ie House & Home Survey said that they had not put up the rent on their properties in the past twelve months.

“While there is no doubt but that rent prices have risen substantially over the past 24 months, the indications are that the trend is plateauing somewhat.  Our survey, which sought the views of both landlords and those in rented accommodation would support this assertion.  And, whilst early days, there are signs that the introduction of RPZs is helping to keep rent increases in check,” said Padraig O’Neill. 

Landlords however are less sure about the success of RPZs.  40% of landlords had all of their properties in a Rent Pressure Zone.   In the main, the majority of landlords did not feel that the introduction of RPZs had a positive affect on the housing crisis (72%).  Not addressing the lack of supply in the market was the reason most cited for its lack of positive impact.

The 123.ie survey found that 69% of landlords have a mortgage on their rental property and of those, 34% are in negative equity.   The majority reported that they were planning to hold onto their properties long-term, although one in five had plans to sell within the next two years.

15% OF HOME OWNERS WOULD CONSIDER AIRBNB

80% of home owners in Ireland live in a three or four-bedroom property and 67% have been in their current home for ten years or more.  More than 6 in 10 homeowners have one or more bedrooms idle and 15% of respondents would consider renting out their home on Airbnb.

92% of people in Ireland are happy or very happy with their home, although 36% of home owners are planning on making significant upgrades to their homes in the next two years.   Almost 4% would like to move in the next 12 months.

“The second-hand housing market is affected by home-owners’ desire to move, access to funds and the availability of a house that they actually want.   With desire to move considered ‘normal’ at 4%, access to mortgages remains tight and with limited new stock coming to the market, it looks like it’s not just the first-time buyer’s market that isn’t functioning properly,” says Padraig O’Neill. 

The 123.ie Irish House & Home Survey was carried out online in July 2017 amongst 834 adults in Ireland.

Michelle Clancy
Marketing Executive
Hi, I'm Michelle and I work in the Marketing team here at 123.ie. Please sit back and enjoy our blog posts, hopefully you find them enjoyable if not somewhat helpful.