Renters paying twice what a mortgage would cost

Renters in Westmeath are in some cases paying more than double what a mortgage on the same property would cost, according to the Quarter 2 rental price report from the property website Daft.ie

It’s only in the case of four-bed and five-bed homes that rents and mortgages are within shouting distance of each other – and rents are continuing to rise, the figures show.

The average rent in Westmeath now is €1,269 – 13.4 per cent higher than a year ago and up 129 per cent from their trough level.

In the last three months alone, rents have risen 3.8 per cent.

The rent on a typical one-bedroom apartment in Westmeath averages €859 – but the monthly mortgage payment on the same building would come to less than half that, just €393.

Even if interest rates were to rise by 2 per cent, the mortgage payment – at €499 – would still be a great deal lower than the current rent level.

For the renter of a typical two-bed house, the monthly payment to the landlord is a whopping €1,039, while a mortgage would cost just €514, or in the case of a 2 per cent interest hike, €652.

Landlords renting out three-bed houses expect rents of €1,197; the bank’s monthly mortgage take on a three-bed would be €704, which would rise to €893 in the case of a 2 per cent interest rate increase.

In the case of a four-bed, renters are forking out an average €1,384, while the mortgage would be €1,339, potentially rising to €1,700. The five-bed figures are €1636 for renters, against a mortgage of €1,402 potentially rising to €1,636.

The report also looks at what average rents are in the rent-a-room sector and finds that in west Leinster, the average is €442 for a single bedroom and €493 for a double – rises of 20.1 per cent and 13.3 per cent respectively over the rents homeowners were seeking twelve months ago.

Economist Ronan Lyons, in his commentary on the report, notes that the number of homes to rent across the country has “collapsed”.

“The typical August in the late 2010s saw almost 2,100 homes available [outside Dublin] to rent at any point in time – although the trend was somewhat downward during those five years – compared to just 424 on August 1st this year,” he states.

To really demonstrate the extent of the collapse, he points out that as recently as in August 2009, there were over 23,400 homes available to rent nationwide – nearly 8,000 in Dublin and 15,500 elsewhere.

“That means that for every 100 homes available to rent thirteen years ago, there are just three on the market today.”