Over the weekend, a reader forwarded me an email she had shared with an Irish politician regarding her attempts to buy a home. I have removed identifying details, including the part of the country about which the author writes, but it is not Dublin, or in any of the major cities. Aside from that, I am publishing it in full with her consent:
Dear (politician),
I am writing to raise a concern regarding government supports for first-time buyers against current rates of house price inflation for family homes. Thank you, in advance, for considering my case.
As you are aware, I am a divorced single mum in permanent professional employment. I am ineligible for Social Protection benefits, bar Children’s Allowance. I am a native of (same town as politician), like you, as are my children. We have been renting privately in a growing development.
I undertook to purchase a property in this development three years ago to stabilise our housing situation – and my children’s lives.
As you advised at that timeI am precluded from availing of any local authority housing schemes, home loans, etc. as I exceed the income threshold for a single applicant.
This stands, even as a single parent, in a one-income household. No exemptions are made.
As a first time buyer, I proceeded to keep saving and working towards private purchase in my own right. I maintain a good relationship with the developers where I am renting. I have been keeping in touch with them about a new phase and I registered my interest in a 3-bed, semi-detached property with the developer over the course of last Summer/Autumn. I was advised that the price would be around EUR410,000. I was encouraged to make contact again to formalise booking deposit c. August 2025, once planning conditions had been satisfied.
Conscious of house price increases in the intervening period, and wanting to ensure that I was planning my mortgage appropriately, I contacted the developers again last week for an update on any changes to the price of the 3-bed semi detached units. I was then advised that the price has increased by 20% (EUR 80,000) to around EUR 490,000 in the intervening months. The developers invited me to contact this June (vs. August) to discuss booking deposit, etc.
In my position, even with the support of the Help to Buy scheme, I know that I will not be approved for a mortgage “Approval in Principle” increase of 20%.
I then moved to apply for the First Home (Government shared equity) Scheme to try to meet the cost increase as I know that I could repay it, subject to purchase, only to discover that the cap on eligible new-build homes in this area is EUR475,000. Therefore, I am also precluded from purchasing the house under this scheme.
As you can appreciate, the cost of new builds has never risen at such a rate in this town. No prospective buyer could have predicted such an increase in a matter of months. Having looked into it further, I note that no other new-build 3 bed semis are available locally for less than EUR490,000. This is a world away from where we were several months ago.
As it now stands, I have no option to purchase the home that I have worked to secure, given this unforeseen rate of house price inflation in our locality. I am simply seeking to purchase a basic, 3-bed family home as a first-time buyer, in keeping with the ambition of the First Home Scheme.
More broadly, a 20% increase in cost for a basic, 3-bed family home is so rapid and enormous that the First Home Scheme no longer serves prospective applicants looking to purchase a 3-bed semi in this locality.
I don’t mean this as any criticism of these schemes, I deeply value them. Indeed, I was seeking to avail of them. I simply wish to make the point that the ceiling caps for eligible properties under the First Home Scheme are no longer keeping pace with rates of house price inflation for family homes in some areas, like ours. These rates of house price inflation far exceed national averages. This situation is deeply harmful to first-time buyers seeking to exit private rental and purchase family homes.
It is distressing to my family and I to understand that this bar has been set – and therefore will be raised – in areas like ours. All we are trying to do is to purchase our first, basic, family home.
Please could you advise, what is being done to address this issue? I would be most grateful if you could direct me to any advice.
My own situation aside, please can you raise this issue as a matter of urgency with relevant Government colleagues?
I am more than happy for you to share details of my case with your colleagues.
Thank you again, and I look forward to hearing from you.
This, I hope you will agree, dear reader, is a woman who has done everything right. While I cannot provide identifying details, she is a highly educated person in well-paid full-time employment with excellent job security in a career that comes with an excellent pension. She is also young enough to be a bank’s dream mortgage applicant. Again, without providing identifying details, this woman is well enough off to comfortably be in the top 10% of earners in the population.
Yet, the housing situation is such that she simply cannot afford a modest 3-bedroom semi-detached home in a non-premium part of the country that meets the needs of her and her children. In her town – and I verified these details independently – house prices have indeed risen as she described.
My reader’s request to Ireland’s politicians is understandable in her personal circumstances: She wants the state’s help to buy schemes adjusted upwards to match the inflation in home prices. The problem for the state, in fairness, is that constant upwards adjustment in these schemes is not sustainable either, and would probably simply cause house prices to rise even more quickly, as my reader would then have the ability to join a bidding war for a home that is now tragically outside her price range.
Last week on these pages, Theo MacDonald highlighted the massive inflow of foreign capital into Ireland pursuing speculative profits in the Irish housing sector. Added to the massive increase in work permits being granted to foreign workers, and sluggish construction, it is very evident that the Irish housing market is beyond the point of crisis. Hard working people like my reader – and her children – are paying the price.