Home ownership trumps long-term rental option, research finds

Cost rental housing appeals to just over two-thirds of people who do not own their homes, according to research from the State's Land Development Agency (LDA).

Surveys of 520 adults in Dublin, Cork, Limerick, Waterford and Galway, living in rented accommodation or with their parents, found most wanted to buy their own homes, but almost half doubted they would ever be able to afford to buy.

While just under 90 per cent said they “like the idea” of cost rental housing, a lower number of renters - 67 per cent - said it would appeal to them personally, with just one quarter saying it had a “strong appeal”.

Under the new rental scheme tenants are charged a rent based on the cost of building, managing and maintaining the homes, rather than on market rates, and are offered long term leases.

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To date a total of just over 125 cost rental homes have been provided by housing charities at three sites in the greater Dublin area at Balbriggan, Stepaside and Leixlip. However under the Government's housing strategy the LDA will be the State's main developer of cost rental homes with a number of large State-owned sites in Dublin and regional cities designated for the development of cost rental housing over the next five years.

The research, carried out by Behaviour & Attitudes for the LDA found relatively low levels of understanding of cost rental with 60 per cent not having been aware of it, though this dropped to 45 per cent when respondents were given a more detailed description of the concept.

About 84 per cent of renters said they would still rather own their home, with just 15 per cent citing a preference to keep renting, but 48 per cent said they thought it was unlikely they would ever have enough money to buy a house or apartment. A third said they aspired to live in a better standard of rental accommodation than their current home.

While cost rental housing is being promoted as a long-term accommodation option, its appeal rose among respondents when they were asked if they would consider it as a short-term solution. Just over 80 per cent said they would be willing to use it for a short period with the long-term intention of still buying a property, when asked if they would stay for up to five years 75 per cent agreed, but asked if they would consider it for a longer duration, this dropped to 57 per cent.

While the concept is promoted as one that offers stable rents and long-term tenancies, when asked to name the main deterrents of choosing cost rental, respondents cited similar disadvantages as the general rental market, including the cost of renting; that it constitutes “dead money”with “nothing to show for it”; enduring uncertainty; the lack of incentive to decorate or buy nice furniture; and the lack of security.

In general cost rental was “marginally more appealing to women and those from middle-class backgrounds” as well as those who don’t have children, the LDA said.

John Coleman, LDA chief executive said cost rental offered a "fair deal" for struggling renters.

“We carried out this research to help us better understand the aspirations and challenges faced by renters in Ireland. We believe the cost rental model, that is central to the LDA’s strategy, can help address a crucial gap in the market to give a fair deal to the many thousands of people who currently struggle to meet their housing needs in an affordable way,” he said.

“Our focus now is on using the increased resourcing and pipeline of sites made available as part of Housing for All to accelerate delivery.”