Buy & Rent

Could it be there is an election in the offing?

It is being reported that young workers seeking a home in our major cities will have 30pc of their rent paid by the State in a scheme aimed at allowing them live close to where they work.

The Government is to pilot an affordable rental scheme for young workers seeking homes in built-up areas where rents continue to rise due to the lack of housing. The scheme will not be open to those on social housing waiting lists, but is designed for key workers including newly-qualified gardaí, nurses and other workers who would struggle to rent a home convenient to their workplaces.

Some €10m has been set aside for 2016 to fund a pilot project. The measure was agreed at the last Cabinet meeting before the election, and will only apply to developments where at least five units are made available. Qualifying criteria including income levels will be decided by the Housing Agency. According to the Private Residential Tenancies Board, the average cost of renting a two-bedroom apartment is €1,240 in Dublin, €901 in Cork and €855 in Galway.N

Newly-qualified gardai, for instance, earn just over €23,000 a year, making it next to impossible for them to rent within easy commuting distances of their work-places. Separately, the Government has also agreed new measures aimed at encouraging the private sector to invest in social housing. Developers who allocate at least 20 units in new estates or an apartment complex for social housing will receive a guaranteed rental income for 20 years.

The units would be leased back to the State and allocated to tenants by local authorities. Environment Minister Alan Kelly said the “innovative” measure was a “significant step” towards securing further investment in social housing. It is hoped to secure 1,000 properties over the coming years under the scheme, but it is subject to State Aid rules.

John Lowe the Money Doctor made the comment that this could be a worth-while initiative but if very little building is taking place its impact would be minimal.

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