'It's a vicious circle' - Renting in Mayo almost €4,000 dearer than paying a mortgage

PEOPLE renting a house in Mayo are paying more than €4,000 a year more than people who have mortgages on similar properties.

A new analysis by moneysherpa.ie has found that renting is significantly more expensive all across the country except South County Dublin.

On average, a renter will now pay €3,588 a year more than a buyer taking out a 90 percent loan-to-value mortgage on the same property.

In Mayo, it is €3,999 more dearer to rent a property rather than take out a mortgage on a similar property.

Calculations for the analysis were made based on the price of an average house in Mayo, which currently stands at €212,869.

With the average rent standing at €1,259 and a mortgage on an equivalent property standing at €926, renters in the county are paying €333 per month on average.

Renters in Mayo, Dublin, Louth, Limerick, Kildare, Meath, Longford are now all paying more than €4,000 more than mortgage holders on average.

The highest difference was in Dublin City Centre, where renters will pay €8,359 more than mortgage holders.

Mayo had the twelfth highest gap between renting and mortgages of all the areas analysed.

Castlebar-based auctioneer Kevin Beirne described the inability of many renters to save for a mortgage as ‘a vicious circle’.

The average cost of renting a property in Mayo has risen by 18.9 percent in the last year, according to the latest Daft.ie analysis.

“It’s a vicious circle, and what can they do? People can’t save. It’s coming up with the ten percent, [needed to secure a mortgage] that’s the problem. The rents are so bloody high,” he told The Mayo News.

“Then again, the landlords and landladies have mortgages to pay too so in order to cover their costs they need the rents to rise too. It’s a vicious circle.”

Mr Beirne said that the rental market had ‘quelled’ somewhat, a trend he attributed to a typically slower demand for housing in the month of November.

There are currently over 70 rental properties available to rent on Daft.ie. This is substantially higher than previous months when as few as 20 properties were listed on the website.

Mayo Sinn Féin TD Rose Conway-Walsh has doubled down on her call for a three-year ban on rent increase and to increase the rent tax credit, which ranges from €500 for single people to €1,000 for couples. 

“Renters in Mayo desperately need a break. It is time for the Government to take up Sinn Féin’s proposal to ban rent increases for three years and to put a full month’s rent back into every private renter’s pocket through a refundable tax credit,” she stated.

Mark Coan founder of moneysherpa.ie said the current mortgage lending rules – which permit a person to borrow four times their annual income – were creating ‘a chasm’ between those who can secure a mortgage and those that can’t.

“Those that can, pay over €100,000 less to live in their home over 30 years and then own a home that they can pass onto to their family if they wish. Those that can’t, pay €100,000 more over 30 years and have nothing to show for it.”

“The government, regulators and lenders need to develop more creative solutions to help trapped renters get on the property ladder.”

Mr Coan added that expanding grants or relaxing credit rules would be ‘misguided’.

“Housing cost inflation and unsustainable repayments are already here in the form of sky-high rents,” he said.

“Relaxing mortgage rules or increasing the scope of grants will simply allow more people to own their own homes and become financially secure.”