Calls for sanction on landlords stockpiling vacant properties

This article originally appeared in The Irish Times.

Focus Ireland rejects suggestion landlords need incentives to renovate vacant houses 

Fiona Gartland

Focus Ireland said “the whole property market is a pile of carrots already” and “a few more sticks might be part of the answer”. Photograph: PA

Landlords should face penalties if they leave homes empty, rather than being offered “carrots” encouraging them to rent them out, said a leading homeless agency.

Responding to suggestions that there should be grants and tax incentives for private landlords to renovate vacant housing, Mike Allen, director of advocacy at Focus Ireland, said “the whole property market is a pile of carrots already” and “a few more sticks might be part of the answer”.

“An empty building in Dublin is a huge public resource, and our inability to access them is causing a lot of misery, so there should be some cost to the people who are stockpiling or hoarding vacant units,” he said.

“You would obviously need to look at where there would be exemptions and so on, but we need to push the onus to the property owner to explain their situation, rather than just constantly offering them more and more incentives.”

Figures produced by the Housing Agency, based on the 2011 census, show there are more than 230,000 vacant properties, the majority of which are in private ownership.

Mr Allen said it was very well worth exploring the potential of vacant properties, but people needed to move on from talk and big numbers.

“What are the things you are going to do on Monday to turn this from big numbers that might be a solution, into actually a home that a particular family can move into?” he asked.

Conor Skehan, chairman of the Housing Agency, has said the vacancy figures are twice the level they should be and suggested there should be incentives offered to landlords.

These would include grants to refurbish the properties, to bring them up to rentable standard, and a tax break on income from rental for two to three years.

Ghost estates

He said while penalties, such as those imposed in France and the UK, were available, he believed incentives work better in an Irish context and could be included in the Government’s first budget.

Mr Skehan also said, before any decision is made on how to tackle vacant properties, up-to-date figures are required from the most recent census, compiled by the Central Statistics Office.

But he said he did not expect the new figures to be very different from those available from 2011, despite the economic upturn and the renovation of ghost estates. Ghost estates would only account for between 5,000 and 6,000 units, he said.

The Irish Property Owners’ Association said they would welcome incentives. They have called for a five-year programme to “open the door” to property “left abandoned as a result of owners’ inability to refurbish to the required standards”.

Stephen Faughnan, chairman of the association, said tax relief had been cut, there had been an increase in standards, USC and PRSI was introduced on rent, as were property tax and water charges. These had “crippled the sector and proved a total disaster for tenants”.

“Instead what is needed are incentives to help owners refurbish and keep this much-needed, centrally located accommodation in the market,” he said.

A spokeswoman for the organisation also said they did not know if the figures for vacant properties would have changed much since 2011, but they were not anticipating a big difference.

The Irish Times: Calls for sanction on landlords stockpiling vacant properties 

Wilson Moore Estate & Letting Agents

Three quick fixes that can help boost the building of new homes

This article originally appeared in the Irish Independent.

The housing crisis shows few signs of easing, but there are three steps, which could be taken relatively quickly, and have a tangible effect on the market. 

Regency believe there are a number of quick ways to help the housing market. Photo: Bloomberg

At residential property developer Regency, we believe that introducing a grant for some buyers, tweaking the mortgage rules governing loan to income, and reducing the rate of VAT on new homes could increase house building by as much as double the current rate.

We welcome the new housing ministry but rather than postulating around reports & submissions, if the Government were to enact these three key measures then thousands of property seekers would be able to purchase homes which would in turn ease pressure put on the rental market.

The 1980s and 90s saw the extensive use of a grant for first time buyers. That could be replicated today, but it should be available to non-first time buyers.

A buyer grant would enable a greater number of people to purchase, and so encourage more building. The criteria to receive the grant should prioritise apartments to improve density and reduced commutes in certain areas. Crucially, it should include people who have bought before but do not have any equity from a previous property - a growing demographic since the crash.

The grant should be graded between those who are first time buyers (FTBS), those who bought a house which is now in negative equity, and those who bought an apartment in negative equity. The potential grant on offer could be €15,000 for houses and €20,000 for apartments.

A second step would be to amend the loan to income (LTI) ratio to 3.75 rather than the current 3.5.
The home loan caps have are pushing more and more people into the commuter belts of big cities - particularly Dublin. This means worsening urban sprawl and all the problems that come with that. By increasing the ratio to 3.75, more buyers would qualify for a mortgage and it would boost the rate of average income couples qualifying for a starter home in Dublin.

"The increase in rents has been the biggest contributor to the homeless crisis as people on rent support are unable to compete with the private sector for a limited number of properties. The Central Bank rules are slowing the migration of people from renting to purchasing, which is having a knock on impact on everyone else in the rental sector".

We estimate that a typical newly constructed three bed semi-detached house in Dublin costs in the region of €285,000. Assuming a household income of €65,000, which is a little above the mean household income across the State, the current LTI of 3.5 means buyers will need a whopping €57,500 deposit regardless of whether they qualify for the First Time Buyer exemption on the loan to value ratio.

Adjusting the LTI to 3.75 would reduce the deposit required to €41,250 which is still sizeable but may well be the difference between buying and not buying for many.

Even that lower deposit of €41,250 is still well above the €35,000 loan to value guide (LTV) under FTB rules which makes the FTB LTV exemption effectively useless for most would be buyers in the Dublin market".

Finally, Vat on new homes must be reduced from the current 13.5pc. This is not a new argument but it remains the case that the current rate is making house building prohibitive as builders will simply not see the returns in the price received.

The current cost of building homes in Ireland is too high - the prices that can be commanded simply don't cover the cost. A quick and effective measure which is open to the Government is to reduce the Vat rate for an extended period - we have seen this introduced in the hospitality sector where it has had the desired affect almost immediately.

The problems we are faced with currently are multi-faceted and there is no one panacea to cure Ireland's ailing housing market. But while the Housing Ministry figures out what other elements can be changed to improve the position, action can be taken now that will have an immediate and positive effect. These, relatively simple, initiatives would have a combined effect to encourage developers to commence or expand their building plans which should at least double the current completion rate of between 1,500 and 2,000 new houses per year in Dublin.

Aodan Burke is director of Regency

Sunday Independent: Three quick fixes that can help boost the building of new homes

Wilson Moore Estate & Letting Agents

Planning to buy a house? Here's how to get the cheapest mortgage

This article originally appeared in the Irish Independent.

In an expected move, AIB will, for the fourth time in 18 months, drop its variable mortgage rate from July 1. Curiously, sister banks EBS and Haven haven't followed suit. 

What are the criteria, and how hard is it to get that loan?

However, KBC, ever aggressive, was quickly out of the traps last week with its own offer, undercutting its rival, but only for new customers - existing ones get new fixed rates.

All have incentives and offers to get customers in the door, from paying your legal fees to discount insurance.

What it all means is that banks want new business. They see cranes are sprouting up (albeit not in great numbers), and rising prices put property front and centre. But don't be fooled. Irish customers still pay almost twice the interest rate on mortgages as other Europeans.

The banks are borrowing the money for free, and passing it along at 3.3 to 4.5pc, trousering the profit. The average mortgage interest rate in Spain, for instance, is 1.68pc.

This week, I'm looking at the different types of mortgages on offer, from the first time buyer to those unfortunate enough to be in negative equity. What are the criteria, and how hard is it to get that loan?

General Tips

Know your Loan To Value (LTV). This is the difference between the value of your house (not always easy to determine) and the mortgage on it. A house worth €300,000 with a mortgage of €230,000 has an LTV of 76pc. The lower this figure, the better interest rate you'll get. Banks may charge for a valuation.

You'll be asked to prove earnings and provide bank statements for at least six months. Preparing these to look as attractive as possible is vital. Don't tip into overdraft; use your debit card and show a clear pathway for outgoings.

Using a mortgage broker will cost around €500, but it is money well spent given such a big financial undertaking. They'll do all the paperwork and know the best banks to do deals with.

Your deposit needs to be clearly shown. Banks don't like other loans providing it, or parents. They like to see clear, long-term savings.

Consider variable and fixed rates. The ECB shows no sign of increasing interest rates, and banks build this into fixed offers, preferring to shore up customers for one, three or five years. They are attractive, but you are tying into a contract.

First-Time Buyer

FTBs only need to find a 10pc deposit up to a house value of €220,000. This is very difficult in Dublin, and 20pc over this figure is needed. For the average house price of €349,000, that means coming up with €46,200 - a significant amount. The Central Bank has been asked to look at this, but is standing firm. It is the main reason house prices in commuter counties are on the rise again - 70pc of starter homes outside Dublin are sold for under €220,000.

Trader-Upper

Moving up requires a deposit or equity of 20pc. So, getting your LTV is vital before approaching your bank. Trading up is an ideal time to consider switching bank - many offer incentives, such as Bank of Ireland's 2pc cash back offer (which PTSB also has). The former has higher interest rates, however. AIB offers free current account banking for switchers while KBC and Ulster offer money towards legal fees.

Negative Equity

Loans are possible if your LTV is over 100pc. However, they are difficult to secure. If you are in a small apartment with a growing family but your mortgage is higher than the property's value, it is possible to get a bigger one, but the requirements are quite stringent; however, you only need a 10pc deposit to secure one.

Here's how they work:

Current house value, €180,000. Current mortgage, €245,000. Negative equity, €65,000 (or 136pc).
You find a new house priced at €350,000, putting up a 10pc deposit (€35,000) and making your new mortgage €315,000, plus the carried negative equity of €65,000. This brings the total loan to €380,000, making the new LTV ratio just 109pc.

Most banks limit the overall LTV (see table) and possibly the mortgage term and amount too. If you are coming off a tracker mortgage they may or may not let you keep it, sometimes with added interest, so cost the new repayments fully. All other requirements are the same.

The table shows current interest rates for new business, based on a €200,000 mortgage over 30 years with an 80pc LTV, along with negative equity mortgages.

Independent: Planning to buy a house? Here's how to get the cheapest mortgage

Rent crisis: 'The landlord didn't fix broken things - we went the whole winter without heating'

This article originally appeared in the Irish Independent.

Housing and homelessness have been listed among the top priorities for the new Government. But for many of the thousands living in rented accommodation, reform will come far too late. 

A view of Dublin city centre from the top of Liberty Hall. Photo: Damien Eagers

The latest Daft.ie report grabbed headlines when it found that prospective tenants can expect to pay at least €1,000 per month for the average property in Ireland.

But that is little surprise to many who have hunted high and low for affordable accommodation in recent months.

On May 1, rental supply was at its lowest point on record with fewer than 3,100 properties available to rent nationwide, according to the report.

In 2015, that figure was 4,300 and in 2009 there were 23,000 homes advertised to rent.

As of Thursday, there were just 3,400 rental properties available, and with so few places on the market, tenants are becoming more willing to settle for extremely poor conditions at eye-wateringly high prices.

But soaring rents are not the only worry, with some tenants citing unrealistic demands from landlords and breaches of contract.

Landlords in turn cited red tape and other barriers to making accommodation more easily available.

It's a perfect housing storm where nobody is happy, and nobody claims to be winning.

Read More: 'I pay €830 a month for an apartment in a block that does not feel safe and reeks of sewage'

Read More: 'One house I viewed was on different websites, under different landlords, with different photos - but the same address'

Read More: Broken lifts, stinking sewage and incessant fire alarms - renter tells of shockingly poor conditions in Dublin complexes

But rent hikes, vicious competition for leases and shabby accommodation are just the tip of the iceberg for generation rent.

Roisin, a masters student who did not wish to be identified, said her current letting agent demanded that she and her housemate paid up 12 months' rent before being allowed to move into the property.

"She got really angry when she found out I was a student," she said. "Once she discovered that, she said I had to pay the entire year's rent upfront."

While Roisin felt the demand was extortionate, she believed she had no other alternative.

"We did pay it all in the end," she said. "We didn't have much choice. We had been looking for about a month, and we were getting nowhere," she added.

Roisin says the total sum exceeded €7,000 and did not include her security deposit. To amass the funds, Roisin had to turn to her parents for a loan.

Argentinian-born Patricia moved to Dublin with her daughter last summer, seeking a new start after her restaurant in Italy went out of business.

Patricia then moved to a two-bed rental property, paying out €1,300 to secure the property initially.
However, she says her current situation isn't much better.

"The landlord comes inside the house with his keys all the time," she says. "He didn't fix broken things in the apartment - we went the whole winter without heating."

Read More: ‘House-hunting rejection is even worse than online dating’

But Fintan McNamara of the Residential Landlords Association of Ireland (RLAI) dismissed claims that it was a landlord's market.

Mr McNamara said charges and taxes faced by landlords did not encourage people to buy property to let - contributing in part to the shortage of rental accommodation.

He also called for a reduction to the PRSI payable by landlords, and a revision of current rental regulations.

Under the regulations, which came into force in 2013, all rentals are required to have decent food-preparation facilities, heating appliances controlled by the tenant and access to laundry.

Crucially, they are also required to have a bathroom inside the unit.

While Mr McNamara said he understood that the regulations were well-intentioned, he felt they needed to be reconsidered.

"Let's be clear here - landlords don't have a problem with the regulations on kitchens and good housing standards," he said.

"It's only that there is a requirement for a bathroom en suite. It's just not economically and structurally feasible in a lot of properties."

Mr McNamara added that many landlords he knew wanted to rent out a well-kept property to tenants, but were unable to because of the en-suite rule.

He also welcomed Housing Minister Simon Coveney's statement that he was "open" to allowing for bedsits to alleviate the rental housing shortage.

Kevin Donoghue of the Union of Students in Ireland said he was willing to "engage with any recommendations" to ease the accommodation crisis.

"There is a potential to allow for non-traditional forms of accommodation - that could include bedsits, but also modular housing if it was done well," he said.

However, he stressed such action must be accompanied by long-term plans for purpose-built student accommodation in Ireland's main cities.

A spokesperson for the Residential Tenancies Board (RTB, formerly known as the Private Residential Tenancies Board) said while it does not encourage an upfront payment of a yearly rent, landlords or tenants could do so if they wished.

However, the RTB stressed that tenants were entitled to receive a rent book or records of all rents paid during the tenancy.

A spokesperson also said that complaints about maintenance issues in the property should be made in writing to the landlord.

They also stated that it was never acceptable for a landlord to enter a property without giving notice.

Irish Independent:  Rent crisis: 'The landlord didn't fix broken things - we went the whole winter without heating'

AIB's mortgage rate cut puts fresh pressure on rival lenders

This article originally appeared in the Irish Independent.

The pressure on banks to cut their variable rates has been ramped up after Fianna Fáil resubmitted a bill to the Dáil which would give powers to the Central Bank to enforce cuts in rates. 

AIB has said it will be reducing its variable rate for the fourth time in July.

The move comes after AIB said it was reducing its variable rate for the fourth time in July.

It is also offering €2,000 for professional fees in a bid to lure in switchers. The bank has the lowest variable rate.

But AIB said the new lower rates applied only to AIB customers. No reduction was announced for mortgage holders at EBS and Haven which it also owns. That means about 80,000 customers will miss out on the latest decrease.

Fianna Fáil's Michael McGrath has handed in a bill to the Ceann Comhairle of the Dáil to give regulators powers to direct lenders to reduce their rates.

The bill would mean that Central Bank Governor Philip Lane would have to assess the mortgage market.

If it was proved that market failure was the reason why variable rates were so high, then Prof Lane would have the power to set a variable rate or cap the rate that can be charged.

Brendan Burgess, founder of the Fair Mortgage Rates Campaign, said the Government would find it impossible to vote against the Michael McGrath bill.

He asked: "Will Minister for Transport Shane Ross vote against such a bill, given his statements on overcharging on mortgages in the past?"

The new Government has identified cutting mortgage rates as one of its key priorities.

State-owned AIB has said its variable rate will come down by 0.25pc from the start of July.

The latest cut in its variable rate will see it come down to 3.4pc for residential customers, both new and existing ones. This will mean annual savings of €320 for someone with a €200,000 mortgage to be paid back over 25 years.

Loan-to-value rates, where the bank imposes a lower interest rate based on the homeowner's equity in the property, have come down by 0.25pc also.

Some 76,000 mortgage account holders will benefit from the new lower-variable rate.

KBC Bank also announced a reduction in its loan-to-value rates for new customers and lower fixed rates for new and existing mortgage holders.

Finance Minister Michael Noonan said he did not expect all lenders to cut their rates.

"Well, the model we're aiming at is a competitive model, so we don't want a situation where everybody moves together.

"We want to get the banks competing with each other, both on variable rates and on fixed rates, and on the various offers which they make."

Mr Noonan said the government had constant meetings with the banks "and we keep constant pressure on them".

Irish Independent: AIB's mortgage rate cut puts fresh pressure on rival lenders

When Is The Right Time To Reduce The Price Of Your Property?

Every homeowner must set an asking price when listing their home on the market, but what happens when you don't receive any offers?  Just as it's important to know when it's time to sell, it's important to recognise the right time to reduce the price.

Supply & Demand

If a lot of homes are currently listed on the market or your home is overpriced, it may be time to consider a price reduction if you hope to stay competitive.  If five different stores sold your favourite furniture, what would motivate you to buy from one over the others?  If you are like most, the cost would be a leading factor.  The same is true with home buyers, who are looking to get the best value for their money.

Hurry Up & Wait

If your home has been listed on the market for what is considered to be a lengthy time for your area, it may be time to consider a price reduction.  This is especially true if you are in a hurry to sell, which may be the case if you are planning to purchase another house upon selling yours.  In some cases, a homeowner will make an offer on another house and that offer will be contingent upon selling their current home.  When this happens, the homeowner is likely to be in a hurry to sell so that they can honour the terms of their new agreement before it expires.  Selling a property can often be a waiting game, but sometimes it may be necessary to hurry up the process, through a price reduction, if you need to complete the sale.

Market Value Fluctuations

We all know how the market fluctuates.  If you own property you already know values can go up one year and go down the next.  If your house is currently listed and the property values have fallen, you may want to consider reducing the price in order to remain in the running with potential home buyers.  If your house is priced far above market value, most mortgage institutions would refuse to approve a loan for your asking price.  Getting a realistic valuation would be the best way to know how much your home is worth.

Recommendations

If you've already appointed an estate agent you will obviously trust him/her to guide you through the process of selling your home.  If your estate agent suggests a price reduction, it may be in your best interest to consider it.  Nobody knows the business like a professional working on a daily basis in the property market.  They know what buyers want and, in most cases, what they are willing to pay.  If you've trusted an estate agent enough to appoint them, trust them enough to value their opinion.  If not then approach an estate agent who specialises in the area where your property is located and get a second opinion on the advice.

Learn More

How Big A Back Garden Do You Need?

You probably have spent a good deal of time considering how much space you need inside your home, but what about how much space you need on the outside of it?  House hunting with an idea of the square footage you are seeking is a good idea, but in addition to that you should have an idea of how much space you will need around your new home as well.

Buying a home with a large back garden can be costly, especially in sought after areas where this may be considered a major selling point.  But if your back garden is really important to you, it might be worth the extra expense.  Consider how often you use your back garden or decking and then decide how large you need your outdoor space to be.

How You Use Your Additional Outside Space

If you don't use your outdoor space much beyond sitting on the patio and enjoying the weather, you probably don't need a huge garden or deck.  Granted, the feeling of space and privacy is nice, but if it makes your dream home unaffordable, is it really worth it?

On the other hand, if you have children or pets, you may need that extra space.  With young kids, you will want to have a good place for them to play outside.  If you have big dogs, you will need the room for them to run around and get exercise.  A good sized garden deck or yard is a requirement for most families with children and pets.

If you like to host a lot of barbeques, you will want enough space for everyone to spread out with a decent sized deck or patio.  In this case the size of the entertainment area is more important than the green space.

Consider The Work Involved

The bigger your back garden, deck, or yard, the more work you will have to do in order to keep it in good shape.  A large lawn means more hours spent cutting the grass, and large gardens mean more time spent weeding and planting.  If you can't do the work yourself because you are too busy, you will probably have to consider hiring someone to maintain it for you.  This can be expensive, especially for if its really large.

Everyone thinks they want a nice garden, but it is important to be realistic about what you need and weigh it against the work and cost involved.

Learn More

Can Changing A Bathroom Increase Your Home's Value?

When you are planning to sell your home, remodeling a bathroom may be one of the best places to increase your home's value.  Depending on the existing condition as well as the style and age of your home, here are a few things to consider before tearing out that sink!

Does The Bathroom Age The House?

It could be a pink toilet or patterned tiles, but if your answer to this is yes, then maybe remodeling can really make a difference.  Prospective buyers will look at this space as a liability rather than a feature, and this can decrease the value of your home.  It may also scare away buyers who are looking for a home that is in move-in condition.  The trick is to keep the new design modern, but timeless.  The white toilet will likely always be in style, and tiles made of natural or neutral materials will keep the space fresh.

Do The Features Match The Price?

Depending on the location of your home and the value of the property itself, it is important to match the features of the bathroom to the rest of the home in order to get the most value out of our investment.  Large homes with big price tags benefit from the bells and whistles of a large bathroom boasting a jacuzzi for instance, but you will likely not get your money back for this in a smaller home which attracts first-time buyers or those looking to down-size.

Does The Design Match The Home?

While you may love the look of the minimalist bathroom, if you own a period home in an old neighborhood, making this decision could cost you in the long term.  While you can get creative in designing a new space, keeping the style of the bathroom in the same overall style of the house will make potential buyers more likely to appreciate the investment you have put into the property.

Ultimately whenever making a decision to redesign a room in your home, the change has to work for you and your family.  Though you may not get back the investment of installing that Jacuzzi, if it is what you want then go for it!  Balancing these tips with your personal taste and needs can make any interior design a more pleasant experience.

Learn More