Monday , April 12 2021

Brex is aggravated by the housing crisis, "experts warned TD

Tacitur Simon Coveney with EU Negotiator Michel Barnier. Photo: AP
Tacitur Simon Coveney with EU Negotiator Michel Barnier. Photo: AP

Brexit plans to destroy an already insecure housing sector, experts warn today.

Two bodies are planning to see how the rise in rent is likely to get worse when the United Kingdom leaves the European Union.

However, household purchasing costs may decline, as the adverse impact on domestic economic activity will undermine workers' ability to save on deposit.

The Economic and Social Research Institute (ESRI) believes that the country should be supported:

• Check the pressure ranges.

• More families need government help to afford to rent.

• The construction of the private sector falls, which means that the government needs to invest more in social housing.

• Decrease in mortgage lending will slow down.

However, mortgage lending increases may be limited.


Separately, Nevin Economic Research Institute tells TD and Senators that housing demand will experience "greater fluctuations" as a result of Brexit.

"Significant regional disparities have the effect of Brexit on the Irish housing market", with "special pressure on the rental sector in the Greater Dublin area".

Rents in capital are already 36 percent higher than the peak of the Celtic Tiger boom.

Both bodies are now providing information sessions to the Oireachtas Housing Committee.

In his opening speech, ESRI's Research Professor and Chief Economics Officer Kieran McQuinn describe the threat to the government's current housing policy.

He refers to Housing Support Payments (HAP), which is soon the social housing support for private tenants in the government's most important income.

"If income and employment are growing more slowly than anticipated by Brexit, the number of HAP families in the coming years is likely to be higher than expected," McQuinn says.

Rental pressure ranges, which limit the number of hikes to 4% a year in some urban areas, may "require more frequent revision".

The central objective of the Rebuilding Ireland project is to get more than 20,000 houses every year.

However, McQuinn warns that, as a result of "greater uncertainty" in Brexit, housing demand and supply diminish.

Household financing also has significant impacts.

It will come when the Brexit negotiations go wrong and the EU has demanded that the United Kingdom accept "a level playing field" if it becomes a UK-wide customs regime.

In particular, the team of EU negotiator Michel Barnier has been warned that the United Kingdom must comply with EU environmental and labor legislation for the duration of the agreement.

This is likely to create more difficulties for Britain's Prime Minister Theresa May at home because many MEPs argue that this is the "residual" of EU rules when they want to negotiate new trade agreements.

It would also limit the ability of the United Kingdom Government to grant State aid to certain sectors of the economy.


However, sources who say "nothing less" are considered to give the United Kingdom "an unfair advantage" in the time after Brexit.

"The EU capitals are tired of the UK-wide recession, at which point the coefficients are in the EU27, but they want to study the little pressure very carefully," they have added.

All parties will approve the deadline for withdrawal of the contract in London this week if a Special Session of EU Leaders is requested last November.

Barnier told EU foreign ministers yesterday about progress, saying that "as in all negotiations, the last stretch is always the most difficult".

He met privately with Tanaiste Simon Coveney later to provide a more detailed update on the boundary negotiators.

Mr Coveney said that support "is stronger than ever" in order to ensure a hard border.

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