Home owner… November 23, 2016Posted by WorldbyStorm in Uncategorized.
Regardless of whether or not it’s more difficult to buy a home today, what is true is that, irrelevant of affordability, home ownership is on the decline as today’s generation of 20 and 30 year-olds postpone buying their first home and spend longer renting.
Home ownership peaked in Ireland in 1991 when a staggering 80 per cent of people lived in a home they owned. But it has been falling since.
That’s a stunning statistic, but ownership is still high.
In 2011 (the most recent figures available), this had fallen to 71 per cent, pushing Ireland closer to European norms of 67 per cent for EU-15 and 71 per cent for EU-28.
Of course let’s note that ownership rarely means ownership, at least not outright. Banks and mortgage providers own houses.
Alongside this, the number of younger buyers has also been on the decline. In 1991, for example, according to figures compiled by NESC (National Economic and Social Council), 16 per cent of those in the under-24 age group owned their own home (with a mortgage), while a further 60 per cent of those aged between 25-34 had purchased a property. This meant that by the time people reached 35, the vast majority were already on the property ladder, with just 5.2 per cent of the population renting from a private landlord. At the time renting, rather than owning a home, was simply not the done thing.
Fast forward just 20 years, however, to 2011 and the figures show that just 6 per cent of under 24s had bought their own home, and 40 per cent of those aged between 25-34. The number still renting in their late 30s/early 40s had stretched to almost 20 per cent.
So clearly there are significant changes – and she further notes that ‘first-time buyers are getting older and renting longer’. There’s further data on how the multiples of income required wedded to interest rates and levels of income tax make the difficulty of purchasing a home not entirely different.
But, for all this I wonder if it is missing the point whether ownership itself is more or less difficult than it was. I remember in the mid-1990s a couple of my friends had purchased houses – or rather had mortgages and I remember, being in a particularly badly paid job, finding the sums they were spending on servicing those mortgages astronomical, certainly it was easier financially to rent. In the late 1990s I was fortunate to get a house through shared ownership – my wage was still very low, and remained so until the mid 2000s.
But a more important aspect to me than ‘owning’ my house was having a place to live with a steady predictable rent. Sure, I heard the stuff about rent being ‘wasted’ money, but I lived where I lived and did so for seven or so years fairly happily. It was home. I don’t think I planned to live there for ever but nor did I have any great wish to move out. And it was more personal circumstances that dictated the move to looking at shared ownership.
And that to me remains the key. If one has a predictable reliable place to live, whether owned or not, that is the fundamental. Like most of us I suspect I’d hope for collective solutions, at municipal and regional and state level. Long term state-owned rental accommodation is one part of that and by long-term I would think we’re talking about decades, potentially lifetimes.
So while it may well be true that it is not much more difficult to purchase houses again, that’s almost beside the point. Providing good habitable options for people beyond purchase is central to any reasonable dispensation in this area.
Shared ownership is another part of that. One of my greatest regrets was that under shared ownership it was impossible to acquire funding to renovate or upgrade the property. The only option was to go to the commercial market, buy out the shared aspect and ultimately become in hock to private mortgage providers. I’ve never understood why this was other than as a conveyer of property from part-state (or municipal) ownership to the private sector.