Our Triggers

It is our 3rd year in Ireland. Since coming here, we have been renting in the same place. We love this place we are renting because it is close to the train station, shops and schools. If we had it our way, we would really want to stay here for the long haul. However, there are some factors that are causing a bit of anxiety with our rental.

First, there is the yearly rent increase. Since we are in a rent pressure zone, the yearly increment is limited to 2%. We have had 2 rent increments so far. Rent takes up half of my take-home pay, and with the increments, there will be a point where I will not be able to afford to stay here. I also checked with some friends; they have not had a rent increase since moving into their places in South Dublin 4 years ago.

Then there is this “rumour” after the Irish election that the government is thinking of removing the rent pressure zone. There is talk that by removing the rent pressure zone, the government is expecting more investment in the construction of new houses. They think investors will consider the profit they can get and therefore invest more in building. It seems crazy that the government would think of troubling the people living in Ireland to appease the rich, but that was our fear.

Finally, we were told that our rental contract for this property lapses after 6 years, and that we have to sign a new contract at that point, which is coming up fast. So we are not sure what signing a new contract means, or even if it will happen. We just want to avoid the unknown after the 6th year.

The Situation in Ireland

This is the year 2024, and there is a housing crisis in Ireland. There are not enough houses for sale, and the government is missing its yearly target for house construction. When I took up this job in Ireland, the hiring manager did say that the only cost of living trouble facing Ireland is the housing shortage. It’s a shortage that started around 2018, made worse during COVID when there was no construction work happening. Ireland’s economy is growing, and it is an EU country. There are tech and pharmaceutical businesses here that are attracting a lot of workers from overseas.

When we arrived here in 2022, the news showed 50 people queueing up to see one house for rent. Things have gotten better since 2024 in the rental market. There are more rental properties, mainly apartments, on the market. However, houses for sale are still very scarce.

The situation in Ireland is not unique. Countries like Australia and the UK are also facing housing shortages in key cities.

Started with a poster

One day I saw this poster near the company canteen. We have a small Bank of Ireland office near the canteen. We thought we would go and have a look at how to get a mortgage. We went to the proper bank branch for the open day, not the small one in the office. It was also a Saturday, typically not a day banks are open. Since the name is “open day”, we thought it would be a booth and we could ask questions and see what we could do. When we arrived, the bank agent took us into her office and explained the process. In the end, we sat down with her to start the application process for the mortgage. There are a lot of differences in the process here vs what we are used to in Malaysia.

As a guideline, first-time buyers’ maximum mortgage limit is 4 times your gross annual income, with the mortgage capped at 90% of the purchase price. Second-time buyers’ maximum mortgage is 3.5 times gross income, with a cap also of 90% of the purchase price. She also explained that since we are renting, if we found a more expensive house, they could apply a “stress” condition, where they take how much we pay in rent as a way to show affordability and use that to increase the mortgage. Also, as I later found out, I had only used my base salary for the loan calculation. They can also take into account my bonuses and some other allowances.

Starting the Application

The goal of the first step of the application is to get a document called “Approval in Principle (AIP)”. This document tells the agent and seller that the bank has approved the mortgage to a certain amount. We need to provide this document for all the bids we made on properties.

We did not bring any documentation when we went to the bank’s open day. The bank agent asked a few questions, like what my base salary was and how much savings I had in the bank, and I was able to show her the balance in my bank account through the phone app. Of course, she also took down the details of the bank accounts that I own.

The tough one was questions about my bank account in Malaysia and the mortgage that I currently have back home. We also needed to tell her how many years were left on the mortgage and what the interest rate on our loan was. Those were details I did not have at the time, so we put in some numbers.

The “interview” took about an hour to talk through. After that, we got access to a mortgage portal. That’s when we needed to enter the “real” information and provide the documentation to prove funds and income. Nothing too complicated. Mainly a salary slip, revenue documents, and loads of bank statements. Once they were satisfied with the documents, we got our AIP within days and could start our house hunting.