In this week’s public policy bulletin, we review a report on the current state of the residential rental market as well as the findings from the latest Personal Loans Report issued by the Banking and Payments Federation Ireland. In addition, we take a look at the Government’s transfer of further Exchequer revenues into the National Reserve Fund, the launch of a government consultation on cryptoasset regulation in the UK, and the latest statistical report on real household income from the OECD.
Up to 21,000 property transactions linked to landlords exiting rental market in past year
According to a new report from Sherry Fitzgerald, approximately 21,000 property transactions last year involved investors exiting the rental market. Publishing the findings of its latest Residential Market Review, the estate agent outlined how for every investor entering the rental sector during 2022, another three investors left. The report sets out how this trend is having a perilous impact in terms of rental supply, and “without significant Government intervention we can expect to see even lower stock levels in the rental market in the year ahead”. You can access the full report here.
€1.6 billion in personal loan drawdowns made in 2022
The Banking & Payments Federation Ireland (BPFI) this week published its Personal Loans Report for Quarter 4 2022 which showed a total of €1.6 billion in personal loan drawdowns having been made in Ireland during 2022. This figure marks an almost 19 percent increase on the previous year and the highest figure since the data series began in 2020. In terms of loan types, some €126 million was drawn down in home improvement loans in Q4 2022, 8.7 percent more than in the same period of 2021. The value of personal loan drawdowns for car or auto finance rose by 18 percent year on year to €126 million while the value of loans for other purposes which includes loans for education, holidays and weddings increased by 16.8 percent year on year to €142 million.
Government transfers €4 billion to National Reserve Fund
Following a decision made as part of Budget 2023 last September, the Government this week announced the transfer of €4 billion of Exchequer funds into the National Reserve Fund. The move follows the transfer of €2 billion last year and brings to €6 billion the total amount of cash now sitting in the so-called rainy-day fund. The approach of capitalising the reserve fund is endorsed by the Department of Finance in its analysis entitled “De-Risking the Public Finances – Assessing Corporation Tax Receipts” published in September 2022. It is also supported by the Irish Fiscal Advisory Council and all other institutions that provide economic advice to Government.
Launch of government crypto-asset consultation
The UK government has this week launched a consultation paper on its proposals to regulate cryptoassets. According to the paper, the proposals seek to deliver on the ambition to place the UK’s financial services sector at the forefront of cryptoasset technology whilst managing potential consumer and stability risks. The government’s proposals intend to include the regulation of cryptoassets within the overall regulatory framework established by the UK’s Financial Services and Markets Act 2000 (FSMA) thereby “taking advantage of the confidence, credibility and regulatory clarity” that this existing system affords. Stakeholders are invited to submit responses to the consultation before the process closes at 9am on 30 April.
Real household income increased for first time since 2021 across OECD
Real household income per capita grew by 0.2 percent in the OECD in the third quarter of 2022, the first rise in real household income since the first quarter of 2021. However, household income results were mixed on a country-by-country basis according to the latest OECD Growth and Economic Wellbeing Report.
Of the 21 countries for which data is available, nine recorded an increase in real household income per capita whilst twelve recorded a fall. Austria had the largest increase (10.1 percent) as payments associated with the government’s environmental tax reform and cost-of-living assistance boosted household incomes. Of the G7 economies for which estimates are available, France, Germany and Italy all recorded growth in the third quarter of 2022, with France seeing the highest increase at 0.8 percent. By contrast, real household income per capita fell in Canada and the United Kingdom and was flat in the United States.
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