Rising Costs And Massive Competition: STELLAR Looks At How The Renting Crisis Is Affecting You

Huge price hikes, massive queues outside every flat that comes up for rent and 25 references required: right now, Ireland’s rental sector is in meltdown, and for anyone looking, finding somewhere to live can rapidly become a nightmare.

“About two years ago the lack of supply started to affect people,” Stephen Large, Dublin Services Manager at Threshold explains. “The simple reason is that housing supply went from a peak where we were building 90,000 units in 2006 to the economic crash, and for all those years since then, there’s been a lack of supply coming on stream. Year-on-year, you need around 20,000-30,000 units to meet demand. We’ve been paying the price for the excesses of the Celtic Tiger and we weren’t meeting stock.”

Initially, Stephen says, the problem wasn’t so obvious as migrants left and people emigrated, but we’re at crisis point now. “Supply is all sucked up, and demand is getting tighter. Now you have rent increases, that’s why we have this situation.”

Tenants are being told, ‘this is what’s happening’.

If you’ve been out on the mean streets, you’ll know how tough it is. Prices are on the increase, and it can be hard to see the justification when often, landlords aren’t doing anything to improve the condition of their properties. “Anecdotally, it’d be a rare rent increase that’s increasing for a specific reason,” Stephen confirms. “It’s very black and white, and there’s no room for negotiation. Tenants are being told, ‘this is what’s happening’.”

People are staying in rented accommodation longer, too. In the first quarter of 2014, 16 percent of tenants were in their rentals longer than four years. Now, that figure is 23 percent. In addition, one in five homes is now rented. “That’s doubled from the 2006 to 2011 Census,” Stephen points out.

In Ireland, we’ve always looked at our private rental sector as transitory. It’s something we use during college; when we’ve just started work, if we’re claiming rent supplement, waiting for a local authority house or to get on the property ladder. As a result, we don’t tend to think of renting as a long-term living solution – we’ve long been a nation of mortgage holders.

That stigmatises the sector somewhat, agrees Stephen, but he says things will change. “We need a mindset change. We’re attracting people coming in who are used to different ways of living – multiculturalism will influence the way people live. It’s a generational thing, over time the private rental sector will mature into a more European one.”

Stephen says that big corporate rental companies may come into the Irish market too. “They haven’t done so far, and they’d bring greater professionalism,” he reveals. In terms of what else can be done, he says it’s very difficult to come up with a solution.

“You can’t look at one part of housing system in isolation because they’re all interlinked,” he points out. “People traditionally used the private rented sector to get started, but always moved on to buy a home or get housed by the local authority. But those two avenues have been closed off; people can’t buy a home any more and so more are staying in the private rented sector fighting for the supply that’s there.”

It’s not confined to the capital, either. “It does manifest itself in Dublin first but across the board in Cork, Galway, Limerick and Waterford, rents are increasing. The rate of increase in Dublin has slowed down somewhat and it can’t go much further, but other areas are catching up.”

This all adds up to an environment where renters are living in increasingly costly, badly-maintained accommodation, finding it hard, if not impossible, to save for the next stage of their lives and wondering what on earth is next. We spoke to four women, all part of Generation Rent, to find out how it’s affecting their future.

The home mover

Laura Phillips, 28, is currently living with her partner in a rented apartment in Clondalkin, Dublin 22.

“This is our first apartment out of home, and it was quite hard to get. We’d looked for a couple of months, on and off, and then we got dedicated for a month. We’d looked at about five places and had been in touch about maybe 15 – we were getting desperate; it was hard enough. We saw places that were just in squalor and flats that were basically studios with a bedroom tacked on.

“One bed flats were going for anything from €1,000 to €1,300. They were nice places, but nothing you’d call exceptional. We didn’t have landlord references, and other people were turning up with deposits and past landlord references, and we had to start bringing our work references and the deposit to viewings.

“We can pay our rent but it’s not affordable for us to rent and save on what we earn. We’ve been together two years and we know what we want – we’d like to get married and have kids, and we’d like to buy a house, but with rent, bills, food shopping… and trying to save for a mortgage at the same time, we just can’t do it.

“When our lease is up in September, we’re going to move in with my mother so we can save our asses off. She offered, but to be honest it was something we’d already started to think about. We’re trying to think ahead – if we buy, we’ll probably have to buy somewhere a bit outside the city. I love Dublin, but I’m willing to move out a bit to get my own place.

“Paying so much in rent impacts on everything. Because I don’t drive, I want to try to save to get driving lessons as well, and I’d need to drive if we do eventually buy. We can’t go on holidays at the moment either, so we’re hoping we might be able to do a mini-break when we’re back at my mum’s. We both want to get married and have kids – we’d probably have the kids first – but we don’t want to do that living back at home – so it’s another thing we’ll have to put off for a few years.”

The migrant

Jenny Feith, 28, is from Austria and is renting in Dublin.

“I moved to Dublin June 2015. Before that I’d been living in London for two years. When I got here, it was quite easy to find a place; I was moving in with a friend and I didn’t even have to be present at the viewing.

“The landlord didn’t ask us for any references from previous landlords – he only wanted work references, and I doubt if he checked them. Our budget back then for a central Dublin apartment was €1,000 – €1,300 and we found a lovely and spacious two bedroom apartment in Christchurch for €1,350 a month.

“Eight months later our landlord told us that he was selling the flat, so we had to find a new apartment, and suddenly our budget for finding a new place was raised to €1,500 – €2,000, without us even questioning it, because that’s just the market price now to find something similar to what we had before. Did our salaries rise? Of course not.

“We had tons of viewings this time and all the nice places where always gone immediately or renting conditions were unreasonable. To finally find a place in Dublin 4, we had to go through an agency, and provide them with references of all kinds, which were as detailed as possible – and they did check them.

“Now we pay €1,750 for a two bedroom apartment that is way smaller that what we had before. Yes, Dublin 4 is a pricier area than Christchurch, but not so much that it would justify paying €400 more for an apartment that’s 15sqm smaller.

“What worries me the most is how it happened, and that I’m just forced to accept it without even questioning it – that within eight months, rent prices would increase 30 percent, and I should say, ‘okay, that’s just how it is.’

“It does put me off Ireland, and I’ll leave eventually, because being able to have a nice home is one of the most important things that contributes to the quality of your life.”

The married couple

Aoibhinn McBride, 32, rents in Dublin 4 with her husband.

“We’ve been renting this flat for two years, and when we first moved in the rent was slightly above market average, but it was in a good location so we took it. Little did we know how much was wrong with it…

“It’s in an old Georgian building so it was really never meant to be in flats and while it’s got gorgeous high ceilings, it’s also got storage heaters that don’t work, plumbing issues – the toilet often doesn’t flush – and we can smell our neighbours. We can smell the woman downstairs smoking and you can pick up cooking scents and things like that.

“It gets so cold in the winter because the windows are single glazed and because of the broken storage heaters, that we had to buy a plug-in electric heater. Sure, we’ve complained about the problems and asked for things to be fixed, but you can only say so much because you don’t want to be bad tenants, especially at the moment.

“Our lease was up for renewal last July and we thought the rent would go up then, but nothing. Then recently we got a letter saying the rent was going up €100 per month, with three examples of similar properties. The rent is already at a premium – and it’s not a luxury flat with all mod cons – so we’re trying to decide if we should stay or go. Realistically, I think we’ll stay because what options do we have, really?

“We’re not in a position to buy right now, and around here, we wouldn’t get anything to rent for less than €2,000 for a two bed. We both earn decent money but rent is having a big impact on our ability to move on with our lives. I can’t save more than €500 a month and come out okay at the other end – I end up borrowing which defeats the point.

“Things are so different for us than they were for our parents: for them it was marriage, house, baby. It makes sense to me to have our ducks in a row, to have the house before the baby. But say we did decide in the next couple of years to have one, we’d still be renting, so it makes you second-guess things, and you put things off.

“I don’t see how it’s feasible for two people to rent and save in Dublin – it all seems to be so hard. I don’t mind renting, but if you felt you were getting an okay deal out of it, you could justify it for the long term. I think if a lot of landlords are going to charge premium rent, then there should be legislation that they should do maintenance to their properties to make it fair.”

The long-termer

Éibhín Nolan, 31, rents in Dublin with her boyfriend.

“I’ve been renting on and off for 13 years and I moved to Dublin when I got a job as an intern in 2012. We viewed a few apartments and picked our favourite in Harold’s Cross, where the rent was initially €725 per month. Last Christmas we received notice of termination – our apartment was being sold. When we moved out at the end of February and began searching for a new place, the thing that struck me was the difference in prices: now the average price was €1,200. We managed to find a place in Donnybrook for €1,300, but having to pay an additional 50 percent extra each month has had a big impact on our finances.

“The process was a nightmare. Most of the viewing are open viewings, we saw one place where the agent told us there were 70 interested parties viewing that evening. The market moves very quickly, so everyone turns up with the relevant paperwork, like references, proof of income and identification, and some can pay cash up front. There’s so much demand that people offer over the asking price in order to secure an apartment – we saw an apartment advertised at €1,200 but it went for €1,400.

“The current housing shortage disproportionately affects people in their 20s and 30s living in Dublin – I think it’s difficult for others to grasp how the hikes in rent have a knock-on effect on your ability to plan for the future. A lot of my friends down the country are buying their first home, getting married and starting families, but I’m putting all those things off because of the cost of rent.

“I’d like to buy but I don’t think I’d manage to save enough for the deposit, so I’ve accepted I’ll be renting for the next few years at least. I’m also wary about buying in the current market in case there’s another property crash.

“Landlords can do pretty much whatever they want as there’s such a demand at the moment – there’s definitely no justification for price hikes, as I believe the standard of rental accommodation in Ireland is generally poor, and I don’t believe the rent controls have been helpful as it’s just given landlords an excuse to increase prices. The real issue is a housing shortage, so there needs to be a major increase in supply soon, before things get worse.

This article first appeared in STELLAR’s June issue! The August issue is on shelves now!