Ireland has one of the biggest gaps in home ownership between younger and older people in western Europe, a new study has found.

The research by the Economic and Social Research Institute found that nearly 80% of people over the age of 40 in Ireland own their own home, but that just a third of adults under the age of 40 are homeowners.

This gap between young and old homeowners is the second highest out of 15 European countries included in the research.

The study also found that households in Ireland do not in general have to spend a higher proportion of their income on housing than those in other parts of Europe.

It also found that on average, Irish households pay a fifth of their net income on the cost of their home.

Just five of the 14 European states examined, Norway, Denmark, Portugal, Austria and Sweden, were found to have better average housing affordability.

In general, Irish households were found to be less likely than those living elsewhere in Europe to be paying over 30% of their income on housing.

Just 15% of Irish residents typically spend more than a third of their income on housing, whereas the equivalent level elsewhere in Europe is 20%, the paper claimed.

When it comes to the proportion of households who pay more than 40% of their income on housing, Ireland is broadly in line with other European states at 8%.

Authors Wendy Disch and Rachel Slaymaker also found that in Ireland those renting a property have the lowest rent-to-income ratios on average.

This is because extensive rental supports in Ireland mean lower income renters pay a lower share of income on rents compared to European peers as they are sheltered from affordability pressures.

That said, the analysis also found that middle to higher income renters in this country are more likely to face high housing costs than their European counterparts.

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The research found 14% of renters in the fourth income quintile in Ireland pay more than 30% of income on rent. That compares to 3% on average elsewhere.

Meanwhile, 16% of renters in the third income quintile here pay more than 30% of income on rent compared to 9% on average elsewhere.

'Affordability pressures'

The report points out that over half of private sector renters not in receipt of housing supports in Ireland fall within these income bands.

"While elsewhere in Europe rising affordability pressures have been primarily concentrated amongst the lowest income rental households, in Ireland extensive rental supports have mitigated the effects for these households," Dr Slaymaker from the ESRI said.

"However, in the market price rental sector, affordability pressures remain elevated and middle-to-higher income renters in Ireland face greater affordability pressures than similar households in Europe," she said.

The ESRI also found a significant urban versus rural divide in the rental sector, with a 5.5% gap in average in the rent-to-income ratio.

That compares to a gap of just 2% in other European countries.

Regarding those with a mortgage, the study found that across European states, mortgage holders are consistently concentrated at the higher end of the income distribution.

Irish mortgage holders rank third highest for the share of their income that they spend on mortgage repayments, even though few households pay more than 30%.

The research was funded under a programme with the Department of Housing, Local Government and Heritage.

More young people in the family home

More young people in Ireland remain in the family home than in other European countries, Dr Slaymaker said on RTÉ's Morning Ireland.

Between 2015 and 2019, Ireland saw the largest increase in the number of young adults (aged 25 to 34) remaining in the family home, she said.

Dr Slaymaker said this, and the low number of young homeowners here, highlights the challenges facing younger people in Ireland.

She said the huge gap between young and older homeowners is very evident in Ireland and that Ireland had one of the highest rates of mortgage repayments of the countries examined in the study.

Results 'not suprising'

The Social Democrats' Housing spokesperson said the results are not surprising and that it has been known for quite some time that middle and high earners do not qualify for HAP and housing supports.

Cian O’Callaghan said the gap emerging between older and younger generations in terms of home ownership was significant and pointed out the report was based on data from 2019.

Speaking on RTÉ’s Morning Ireland, he said that things have gotten significantly worse since then and that people in their 30s and 40s still cannot necessarily afford to rent.

This is hugely frustrating and upsetting for people, he said.

Mr O’Callaghan the underspend in the housing budget is scandalous, adding that the Government had underspent by around a €1billion on the capital side, which he said could have built 10,000 social homes.

He said it is no surprise the Government is not meeting targets on affordable purchase homes or social rental.

Mr O'Callaghan acknowledged that there are capacity restraints, but said the Government must address these in an innovative way.

The Dublin Bay North TD said that the Government should be making apprenticeships more attractive.