The Irish Independent's View: Disappearing property ladder leaves people locked out of and locked into the housing market

"Over time, similar patterns of inward movement would occur on this side of the Irish Sea. The aspiration was for a couple to settle down, buying their first home, but then moving towards a larger house as their family grew. Within a family's lifetime, they would progress from cheaper to more expensive housing with more living space. Policies gradually developed around the idea that young people were just getting on to the first rung of the ladder."

"Paying off some of their mortgage, they would build equity and use that to go on to their next home. The cycle would be self-fulfilling, as the starter home would be bought by another young couple looking to go down the same route. Somewhere along the line though, the property ladder was broken. It takes a lot of time and effort to buy or sell a house"

"The rise in property prices versus real wages makes even getting on to the bottom rung a pipe dream for many young workers. Those already on the ladder cannot move upwards as they are already struggling to pay for the property that was supposed to be their starter home. A report released today says the average property is only sold once every 50 years. The rate at which existing homeowners in Ireland, with mortgage debt, move home is now less than half the level in the UK. The report, by house sales website MyHome.ie and Bank of Ireland, looks at the home transaction process and its negative effects."

Housing previously followed a progression from starter homes to larger family homes, enabling equity buildup and onward moves. That progression has largely broken as property price growth far outpaces wages, making entry unaffordable for many young workers. Homeowners with mortgage debt now move far less often, with the average property sold only once every fifty years and move rates well below comparable levels. Bidding lacks transparency, asking prices diverge from final sale prices, many transactions complete well above asking, and sale processes are lengthy. The combined effect is low housing stock liquidity and high time and effort costs to transact.

Read at Irish Independent