Ireland: Home of the renters

By Fra Hughes

Want to find the cause of the housing crisis? Look in the mirror | David  McWilliams

Vulture funds

In Ireland today, in both the South and increasingly now in the North, the cost of renting a place to live is becoming prohibitive. In an unregulated, market led, free for all housing sector, the price of owning your own home is sky rocketing in parallel with the cost of renting somewhere to live from private landlords.
The value of property is increasing alongside the cost of living yet wages in many cases remain stagnant or in real terms are decreasing.

We are witnessing the perfect storm for Vulture fund speculators and private landlords. As the values of properties go up, deterring first time buyers from accessing the housing ladder, this facilitates Vulture funds and billionaire landlords to buy up new and existing housing stock in order to create generations of renters in perpetuity. If young people cannot afford to buy a home then they must rent,  become homeless or stay living with their parents.

The traditional pattern for those who wanted independence and freedom as adults, was to leave the family home, rent for a few years, save up a deposit, staying in permanent employment, pick an area to live in and buy a home,
start a family and have security of tenure going forward. Perhaps moving to a larger home as the family grows, and hopefully before retirement be mortgage-free with a reasonable disposable income in order to live comfortably in retirement.

For those who could not afford to buy a home based on income or unemployment the government provided state housing with security of tenure and fixed affordable rents. After 50 years of successive neoliberal governmental policies, the housing market had seen a drastic reduction in the building and procurement of social housing with a dramatic increase in housing construction by private companies, when there is profit to be made.

The old economic equation of supply and demand dictates property prices and house rents. On average only 20% of all homes built in new housing development schemes are set aside for affordable or social housing that means 80% of all new private housing stock is generated by market value. With very few social housing units being built, more and more people are being forced to rent. Exorbitant rents decrease the likelihood of young people being able to save towards a mortgage deposit, when such a huge proportion of their salary goes into, simply paying the rent.

While the bank of mum and dad maybe an option for some, the reality is young people must rent for longer and longer periods before even attempting to buy.
If the Vulture funds are allowed to continue to buy up to 80% of new housing developments, then our young citizens will not be able to purchase a home, regardless of cost because the Vulture funds will not be selling their assets. The government in the Republic of Ireland are complicit in allowing this to happen.  They refuse to protect our housing stock from the rapine of capitalism.

Many European cities have rent caps to prevent excessive profiteering by landlords. The response in Ireland to house price inflation is not to restrict rents but to offer 40 or 50 year mortgages. This may become the only way young people can afford the monthly repayments. To work for 50 years, to pay for your own home and potentially pass that mortgage debt onto your children who cannot afford to buy simply takes my breath away.

The financial system endorsed and overseen by government is allowed to make massive profits off the backs of its citizens. Unregulated markets led to the financial crash of 2007/2008. The boom bust biblical cycle of 7 years of lean followed by 7 years of fat is repeated in the capitalist economic cycle of ten years of boom and ten years of bust. While people look at short term  governmental policy of 4/5 years, they miss essentially the long term failures of the capitalist system.

If Vulture funds and private billionaire landlords, some of the latter sitting in government, continue to buy up as much of the available housing stock as they possibly can, rents will be continue to rise. People will not be able to buy a home of their own. A renter economy will become entrenched in society. Can you imaging working all your life to pay rent, then retiring on a state pension and perhaps a small private pension and still be forced to pay huge rents until you die?

What kind of a soulless life in retirement are the government creating for those who produce the wealth in society, for us, the working man and woman? If we cannot pay the rent from our meagre savings, are we then to live in homeless shelters?

If you think this is far fetched, just ask yourself why billionaires and Vulture funds are buying property in Ireland, both North and South. It’s simple. They are buying homes so they can rent them out and create huge profits from the extortionately high rents. It’s a racket endorsed by government. If you want a roof over your head you must pay the prices they demand. They are not in this for ten years or twenty years or thirty years .This is all pure profit. They are in it for a lifetime, your lifetime and for lifetime of your children and grandchildren.

Venture capitalists would love nothing more than owning all the property in Ireland and forcing people to rent for life. That’s a capitalist landlord’s dream. Profit in perpetuity. It’s a racket to be sure. One that that Irish government in the South, and increasingly the administration in the North, appear happy to see develop. I fear the present systems of government extols the excesses of the private sector, over the health and wealth of the common people. That’s you, me, our children, and grandchildren.

It’s not time to change those running the system.

Its time to change the system!

SOURCE: The North Belfast Journal