Why a rental crisis now?

testaccount123

I keep seeing people saying landlords are exiting the market. What's the source for this claim?

4ensic15

testaccount123 wrote: »

I keep seeing people saying landlords are exiting the market. What's the source for this claim?

Statistics published by estate agents. A higher proportion of vendors are landlords than the proportion of intending landlords who are purchasers.

testaccount123

4ensic15 wrote: »

Statistics published by estate agents. A higher proportion of vendors are landlords than the proportion of intending landlords who are purchasers.

Thanks, have you got a link?

4ensic15

testaccount123 wrote: »

Thanks, have you got a link?

http://pdf.euro.savills.co.uk/ireland-research/market-in-minutes/residential-market-report---q1-2015.pdf

Receiver and investor sales combined show that there are more landlords exiting than buying.

ibstar

http://www.irishexaminer.com/business/oecd-warns-of-irish-risks-including-another-property-bubble-364083.html

Looks like the graph posted previously ITT was spot on (I didn't doubt it for a second when I seen it).
How can something like this happen again within such a short time?
This almost looks like a dramatic last heartbeat on a life support machine before the patient ether dies or recovers.
The only problems is that we have our politicians playing the role of the doctors.
Would you like to be looked after by a doctor who got the job trough his family member,without any exposure to the real world?

The_Conductor

The_Conductor wrote: »

The biggest issues in an Irish context are- on the one hand- everyone thinks they have a god given right to own property- and they do not want to see themselves living in rented accommodation long term- despite the fact that they cannot afford to purchase property themselves. On the other-hand- landlords are portrayed as rich facist bogeymen with bags of money who are out to shaft tenants, the taxman- and society in general (I only have to look a few posts away to see this viewpoint).

I don't think landlords are rich fascist bogeymen (I know several personally).

I do think that speculation in the property market is immensely damaging for society. I also think that a significant number of BTL landlords are in the market for speculative reasons.

We are in the process of creating a two-tier society with completely perverse incentives - whereby the already privileged can simply 'invest' in property and sit back and do nothing, whilst productive, working members of society never own their own homes.

This isn't fantasy - look at what is happening to the property market in London. That society is bad for the country and bad for our competitiveness.

Meanwhile this idea that we need more landlords is also total nonsense. All available statistics suggest that the private rental sector has increased substantially in the past 15 years. And here we are - with a housing crisis - even though we have so many more landlords!!! How on earth can that be!?

The truth is private rental accommodation has a pretty terrible record as a solution to the housing needs of a society. Of course some people want to rent. But most don't - precisely because they don't have the sort of protections the government is thinking of introducing.

It is rather laughable to hear people saying "people need to stop obsessing about owning their own home" whilst insisting any protection for renters is unacceptable.

keane2097

I don't really follow this "landlords are leaving the market and you'll be sorry" line.

Are the landlords burning their houses to the ground on the way out? I would have thought that as they leave they are passing the houses onto other people.

FrStone

keane2097 wrote: »

I don't really follow this "landlords are leaving the market and you'll be sorry" line.

Are the landlords burning their houses to the ground on the way out? I would have thought that as they leave they are passing the houses onto other people.

Yep they either sell or leave the house empty. Considering a huge amount of buy to let mortgages are in arrears, they are most likely selling. Which is generally good news.

hytrogen

hytrogen wrote: »

Why don't you make them an offer so?

I own my home thanks.

It's always very revealing when people assume you couldn't possibly just care about or sympathise with someone else, and can only hold an opinion for selfish reasons.

Certainly tells you something about how that person views the world.

riclad

We need more landlords and more rental units,
but landlords get 75 per cent interest tax credits for loans on a rental home.
No tax credits on capital payments on the loan.
so your loan could be a lot larger than the rental income ,
And you pay tax on some invented profit because the revenue ignore all capital payments .IF the tenant stops paying rent it may take a year to evict him thru the courts ,as we have laws from 1900 in regard to tenants right .
And its very hard to get money from the tenant if the house is left wrecked .

It,s almost as if the government hates landlords and wants them out of business .
Landlord,s provide a service many people cant afford to buy a house or
cant get a mortgage.
Many btl units are taken back by the banks and sold to joe blogs,
another rental unit off the market .
Landlords should not have to pay property tax unless they are making a
real profit of say 4k at least per year.
Everything the government does in the last 5 years seems designed
to increase costs for landlord,s .
IF open a shop or drive a taxi your tax is based on the real profits
You make after expense,s .
eg revenue minus all business expenses =profit .
the whole system we have seems designed to screw landlord,s .
maybe it worked when you could buy a house for 40k,
it does nt work in 2015 when a house is 100k .
Landlords are not popular so no one cares .
So i expect we,ll see a decline in rental units on the market for the next
10 year,s .
IF the economy improves we might see more people coming to live in
ireland , will there be places for them to live is another question.

Villa05

If you borrow to buy shares, can you offset the interest against tax on dividends?
I think not, so why is their an expectation that you should be allowed do it on a BTL

Villa05

Villa05 wrote: »

If you borrow to buy shares, can you offset the interest against tax on dividends?
I think not, so why is their an expectation that you should be allowed do it on a BTL

Buying shares isn't running a business, being a LL is.

In reality a BTL LL should be allowed to offset the entire mortgage repayments (100% of interest and capital) against tax. This would make it a much fairer system and treat it more like business where you are taxed on profits not on gross income (less the few things you are allowed to deduct).

I would also have a good chance of stopping rents getting too high as a LL won't need to make as much gross income to make a profit.

riclad

This is being discussed on the joe duffy show right now.
This country needs a strong rental sector ,its part of a vibrant economy .
Landlords provide a place for people to live ,for people on rent allowance ,low incomes and workers .
Landlords provide a vital service , like taxi drivers or bus drivers .
They are an important part of any modern economy .
So landlords are being taxed on the privilege of making a loss in many case,s .

Joe Late Notch

Joe Late Notch wrote: »

Buying shares isn't running a business, being a LL is.

In reality a BTL LL should be allowed to offset the entire mortgage repayments (100% of interest and capital) against tax. This would make it a much fairer system and treat it more like business where you are taxed on profits not on gross income (less the few things you are allowed to deduct).

I would also have a good chance of stopping rents getting too high as a LL won't need to make as much gross income to make a profit.

Building houses & apartments or else convincing thousands of people not to want to live in Ireland are the only ways of doing this.

Supply and Demand are way out of sync.

Encouraging more people to become landlords only works if you convince them to build houses. If 15,000 people tomorrow woke up wanting to be landlords, what would happen?

CramCycle

Joe Late Notch wrote: »

This would make it a much fairer system and treat it more like business where you are taxed on profits not on gross income (less the few things you are allowed to deduct).

I would also have a good chance of stopping rents getting too high as a LL won't need to make as much gross income to make a profit.

I suppose the theory was or is that your mortgage repayments are, in the minds of the legislators, like a savings account. They are not profit but they are not a business expense in that once you pay off the mortgage they are gone, if you are using the rent to pay the mortgage, you are not in theory loosing money, you are investing the profits. In fact they are similar to the shares analogy.

You don't know if they will be worth more or less, and in some cases, they maybe worth nothing but thats the gamble the landlord takes.

I am not saying its right or wrong, not sure I am certain but I presume this is where the thinking came from.

Joe Late Notch

Joe Late Notch wrote: »

I would also have a good chance of stopping rents getting too high as a LL won't need to make as much gross income to make a profit.

Rents bear no relation whatsoever to the landlord's ability to make a profit. They are based on supply and demand.

Do you actually think if we reduced landlord's costs they would reduce rents? Why? Why don't landlords who own property outright charge less?

The economic illiteracy on here is scary

handlemaster

http://m.rte.ie/news/ireland/2015/1110/740917-housing-kelly/

ongarite

From RTE:

The Government has announced a series of major reforms to the private rental sector in to provide rent certainty for both tenants and landlords

I'm not seeing the certainty for landlords in the proposals at all.
More power to tenants than ever before with even more work for the PRTB to administer.

Nothing on tenants withholding rent or ignoring eviction notices.

Deleted User

Deleted User wrote: »

Do you actually think if we reduced landlord's costs they would reduce rents? Why? Why don't landlords who own property outright charge less?

Well a LL who owns a property will actually have less to offset against tax so may be even more inclined to increase the rent.

Also I'm not saying the rents are directly related to the ability to make profit but there is no doubt that the amount of tax paid by LLs thus reducing their net profit drives them to increase rents in order to make a little more profit.

Remember for every 100 euro in increased rent a LL gets less than 50 into his pocket.

_Kaiser_

So according to these new rules, someone who faced a rent review this year will not get another until 2017.

What if you moved into a new place this year and weren't due a review until 2016.. is that also put back to 2017, or would it be from 2016-2018?

CramCycle

2 years from your last review or 2 years from the date you moved in, whichever is later.

hytrogen

[Deleted User] wrote: »

I own my home thanks.

It's always very revealing when people assume you couldn't possibly just care about or sympathise with someone else, and can only hold an opinion for selfish reasons.

Certainly tells you something about how that person views the world.

Sincere apologies, judging by the tone of the thread up until then I expected your comment to come accompanied by a small violin with a hint of 'au du let me have an attractive property in a very attractive location for less than I can afford' followed by a drummer or rattle discarded from a pram..
The musk is pungent in these parts sadly!

hytrogen

handlemaster wrote: »

http://m.rte.ie/news/ireland/2015/1110/740917-housing-kelly/

What I cannot comprehend is they launch the HRI scheme to get Biddy & Old Tom to clean out their coffers to coerce them into building an extra bedroom or two & take in a student (if they're anywhere near UCD / DCU) or a lodger in the commuter belt and then just as everyone's built they run this insane move to basically reep in all the earnings before anyone has even seen a tax rebate of costs.. do the really have their heads up their own (sun doesn't shine in this area) & expect people to vote Labour back in with Kelly at the helm... (Closed question & reverted to Political Cafe for unresloved solution!) But seriously it is a joke to squeeze LL's like this!

The_Conductor

hytrogen wrote: »

What I cannot comprehend is they launch the HRI scheme to get Biddy & Old Tom to clean out their coffers to coerce them into building an extra bedroom or two & take in a student (if they're anywhere near UCD / DCU) or a lodger in the commuter belt and then just as everyone's built they run this insane move to basically reep in all the earnings before anyone has even seen a tax rebate of costs.. do the really have their heads up their own (sun doesn't shine in this area) & expect people to vote Labour back in with Kelly at the helm... (Closed question & reverted to Political Cafe for unresloved solution!) But seriously it is a joke to squeeze LL's like this!

The HRI scheme was dreamt up with the sole purpose of bringing all those hand-in-cash trades- into the tax bracket. Why would a consumer- a member of the public- pay some randomer for house renovation work under the table- when they can get the VAT back from a properly registered tradesperson. Most consumers would have a blank look on their face if you mentioned a C2 certificate- however- they are quite familiar with the notion of getting their VAT back from a properly registered tradesperson.........

Revenue have several sections who deal solely with the various cash-in-hand trades- and try to minimise leakage to the black economy. This scheme- was a brainwave by a civil servant in one of those sections- and I hope they are lauded for it.

The HRI scheme levels the playing field somewhat between fully registered tax paying workers in the construction sector- and those bilking the taxpayers of the country- by handing consumers an incentive to use fully registered compliant tradespeople. Well done whoever dreamt up the scheme.

http://www.theguardian.com/world/2015/nov/19/damning-report-exposes-europes-escalating-housing-crisis

“Housing becomes less affordable as market demand becomes heavily influenced by investment motives, which is illustrated by the evolution of house prices compared with GDP growth in most European countries,” according to report authors József Hegedüs and Vera Horvath.

Craicho5

JustTheOne wrote: »

There is plenty of houses outside of Dublin people who are receiving rent allowance can move into but wont.

Loads of working people had to move outside of Dublin where they can afford.

People are too fussy.

A lot of stories I are single mothers with kids receiving rent allowance but wont move outside of Dublin.

You cant be picky when receiving money for free to pay your rent.

Seen a couple today in the media unemployed and receiving 950 a month and are afraid they will become homeless.

Hi JustThe One,

I do see where you are coming from and I appreciate your point but I think it's more than fair that people are fussy about choosing a home for themselves and their families, especially children.

I do not receive rent allowance and I have been forced to move out of the city centre, not because of price, but because there is no where up to an acceptable living standard available to rent for myself, my partner and small child.

We rented 2 apartments in the city centre in 2014-2015, (approx. 1200 per month) - one was so freezing cold that we could see our breaths and the other had only 2 windows so no ventilation and black mould started to grow in the bathroom and adjoining bedrooms. I have countless friends with the same issues.

Moving outside the city is not a solution either, we now pay €1250 a month for a small 2 bed apartment in Maynooth which is so poorly sound insulated that we can hear our neighbours every move! This was our ONLY choice. The building seems to be made from cardboard (like many other properties built during the boom) so it is not ideal. I also now have a 3 hour commute each day to get into the city to work.

The single mothers you mention may have no family or support networks outside of Dublin, or even a means of transport to get into the city. People should not be forced into seclusion.

Rent allowance or no rent allowance, we should all be entitled to a safe and secure home for our families to live.

Barely Hedged

Craicho5 wrote: »

Hi JustThe One,

I do see where you are coming from and I appreciate your point but I think it's more than fair that people are fussy about choosing a home for themselves and their families, especially children.

I do not receive rent allowance and I have been forced to move out of the city centre, not because of price, but because there is no where up to an acceptable living standard available to rent for myself, my partner and small child.

We rented 2 apartments in the city centre in 2014-2015, (approx. 1200 per month) - one was so freezing cold that we could see our breaths and the other had only 2 windows so no ventilation and black mould started to grow in the bathroom and adjoining bedrooms. I have countless friends with the same issues.

Moving outside the city is not a solution either, we now pay €1250 a month for a small 2 bed apartment in Maynooth which is so poorly sound insulated that we can hear our neighbours every move! This was our ONLY choice. The building seems to be made from cardboard (like many other properties built during the boom) so it is not ideal. I also now have a 3 hour commute each day to get into the city to work.

The single mothers you mention may have no family or support networks outside of Dublin, or even a means of transport to get into the city. People should not be forced into seclusion.

Rent allowance or no rent allowance, we should all be entitled to a safe and secure home for our families to live.

What about couples who've had to emigrate for work and then decided to have children. Where is their support network?

What about working couples who've had to move from Dublin to Meath/Kildare. Where are their support networks?

Life is about comprising. I don't see why people should get their first preference and no compromise when they've contributed feck all

mirrorwall14

Craicho5 wrote: »

Hi JustThe One,

I do see where you are coming from and I appreciate your point but I think it's more than fair that people are fussy about choosing a home for themselves and their families, especially children.

I do not receive rent allowance and I have been forced to move out of the city centre, not because of price, but because there is no where up to an acceptable living standard available to rent for myself, my partner and small child.

We rented 2 apartments in the city centre in 2014-2015, (approx. 1200 per month) - one was so freezing cold that we could see our breaths and the other had only 2 windows so no ventilation and black mould started to grow in the bathroom and adjoining bedrooms. I have countless friends with the same issues.

Moving outside the city is not a solution either, we now pay €1250 a month for a small 2 bed apartment in Maynooth which is so poorly sound insulated that we can hear our neighbours every move! This was our ONLY choice. The building seems to be made from cardboard (like many other properties built during the boom) so it is not ideal. I also now have a 3 hour commute each day to get into the city to work.

The single mothers you mention may have no family or support networks outside of Dublin, or even a means of transport to get into the city. People should not be forced into seclusion.

Rent allowance or no rent allowance, we should all be entitled to a safe and secure home for our families to live.

But I would consider your post to be exactly why I don't think people can afford to be fussy. You had to move. You had to compromise. You now have to commute. Why should the workers have to do all the compromising when others get to not contribute/minimally contribute and get to live exactly where they want?

Life is compromise. If I had a free roof over my head I'd be happy

sondagefaux

The Census figures released today show that there are tens of thousands of empty homes across Ireland.

There are 198,358 empty dwellings across the state, not including holiday homes or other dwellings that were temporarily unoccupied at the time of the census.

A certain percentage of these dwellings probably wouldn't be ready for immediate occupation, but even if, at a conservative estimate, half of them were ready (or could be made ready within weeks), there could be close to 100,000 currently empty dwellings ready to occupy at short notice.

http://cso.ie/en/releasesandpublications/ep/p-cpr/censusofpopulation2016-preliminaryresults/housing/

Perhaps incentives could be give to encourage people who aren't working, and who won't be looking for work for a few years or ever again (mainly lone parents, disabled people and retired people) and who rely on Rent Allowance to move to areas where there is a large surplus of empty dwellings.

In practice, this would mean encouraging people to move out of the cities and larger towns into villages and small towns.

Rural Resettlement Ireland, a charity to encourage people to move from the city to rural areas, has been operating for over 20 years - maybe an expanded version of this programme, aimed primarily at people reliant on Rent Allowance in larger cities, could be introduced?

Participation would be voluntary, but there could be a range of incentives designed to ensure a high take up, along with support to help people settle into their new homes and communities, similar to the support provided by Rural Resettlement Ireland (RRI).

It would help to bring new life to rural areas undergoing depopulation, give alternatives to people who may be worried what their children might get up to if they continue to live in cities, and free up much needed accommodation in the cities for working people and their families.

According to its website, RRI has helped 700 families to resettle in rural Ireland. Not bad for a small, private charity. Imagine what a state-funded scheme could do over the same time frame. It doesn't have to cost the earth and it could pay for itself by reducing the overall amount spent on RA and other benefits.

A programme like this would probably only make a marginal difference in urban areas but could make a massive difference in some rural areas where a handful of families with kids moving into an area could mean the difference between the local school closing or being kept open.

The main way to get rents down is to build more houses in areas of high demand.

That's obviously not happening at sufficient speed at the moment so the government needs to look at temporary incentives in those areas to encourage more housing construction.

The FF-led governments of the property bubble years didn't target incentives anywhere near efficiently enough. The decisions to give tax breaks for housing in the north-west counties led to the crazy situation where even today 29.5% of houses in Co. Leitrim are unoccupied (Census 2016 figure), while there are housing shortages in Dublin, Cork and Galway in particular.

Any incentives to encourage more housing to be built must be targeted at only areas where there's a proven shortage of housing and must be only temporary.

L1011

A lot of that figure are undeclared holiday homes or derelict beyond the point of cheap inhabitation.