Are the Irish architects of our own doom from our housing policies?

Macha

athtrasna wrote: »

RoboKlopp wrote: »

Tenants rights in Ireland are shocking.

No way should a 55% increase be allowed

Only allowed if rent is 55% or more below market rate

In Belgium where I rent, you can only adjust the rent according to a national index and only every 3 years. The Irish rental market is an absolute mess and the lack of basic regulations like these are a large part of the problem. Applying simple free-market economics is ridiculous and not the case in the vast majority of European countries. Hell, my rental deposit goes into a back account in my name and I earn the interest off it.

The_Conductor

RoboKlopp wrote: »

Tenants rights in Ireland are shocking.

No way should a 55% increase be allowed

Thats all relative though.
If they have consistently been paying massively under what is the norm in the area- it was inevitable that a day of reckoning was going to come.

The landlord has gone into receivership- so while he/she may have been satisfied to charge 1,100 (or whatever amount)- the receiver is now looking at this coldly from a business perspective.

If you look at Daft.ie- unfortunately- even after the increase the OP has been advised of- for a 2 bed in D1- its still below market value.

In a situation like this- I'd contact the receiver- advise that the increase is simply unaffordable, period, and try to negotiate it down. It may be that you only get a 150 or 200 quid reduction- aka its still a significant increase- however, it may be a sufficient concession to allow the family remain there.

To the people who would blithely suggest they should simply move- it really isn't that easy- especially with young children who are in creche or school- it involves a lot of upheaval.

I'd also like to counter the poster who suggests that the OP's finances must have improved along with the economy in Dublin. I don't know where they are from- or where they are living- but the average worker in Dublin is as likely to have had a cut in their hours- as they are to have had a pay rise. Some sectors- typically finance and IT- have indeed seen good increases in rates (but not of a 55% ballpark). The economy is benefiting a certain cohort of people- but it is by no means ubiquitous.

OP- contact the receiver and negotiate- and while you're doing so- explore alternate options elsewhere- but put as much effort as possible into negotiating.

The_Conductor

Macha wrote: »

In Belgium where I rent, you can only adjust the rent according to a national index and only every 3 years. The Irish rental market is an absolute mess and the lack of basic regulations like these are a large part of the problem. Applying simple free-market economics is ridiculous and not the case in the vast majority of European countries. Hell, my rental deposit goes into a back account in my name and I earn the interest off it.

The Belgian (and indeed other EU) rental markets- are significantly better developed than is the Irish market though.

In Ireland- over the course of 15 years- we sold off over 70% of our public housing stock- and abolished the entry level accommodation for those were unable to house themselves (bedsits- which in all fairness, was something that should have happened at least 30 years previous)- all the time without adding to the supply of public or social housing.

In short- the Irish government made a conscious- or an unconscious- decision (depending on whether you imagine they even copped what they were doing)- to abdicate their responsibility to accommodate those incapable of providing their own accommodation- to the private sector.

The private sector- meanwhile- had been buffeted with all manner of allegations for years- which eventually- resulted in the 2004 Residential Tenancies Act- a law which enshrined in stone for the first time- people's rights and obligations (both tenants and landlords).

A small cohort of people- decided to abuse that law to their advantage- in the knowledge it had no teeth- and so you ended up with growing numbers of people choosing whether or not to pay rent- or indeed to vacate a property at the end of a tenancy (for whatever reason). As it was perceived that you could stay for between a year and two years- because the then PRTB couldn't get its act together- you ended up with landlords abusing deposits- knowing they had a good chance of getting away with it- and on the other side of the fence- tenants overholding- and often destroying property- in the knowledge- they too probably would get away with it- i.e. it was an untenable situation that suited no-one, was not fit for purpose- and its principle result- was a stampede to the door by smaller landlords- which in turn constrained supply further still- causing yet more grief for tenants (and indeed landlords- who are treated appallingly by the tax officials).

So- into this mess- for the first time ever- we have a Housing Minister- a knight in white armour, burnishing a sword- ready to do battle- the core knux of which has to be the massive increase in the numbers of property both for rental and purchase.

The first press releases- have been decidedly lukewarm- while acknowledging that there is an issue in our major urban areas- the Minister is announcing initiatives to 'increase the supply of starter homes'- with no cognisance of the simple fact that his predecessors did this in the 10 years from 1996 to 2006- which has resulted at this stage- in two generations of urban children living in apartments which are not suitable to their needs- there is no route open to people to upgrade from a 'starter' home to a 'family' home.

Its a start though- and a badly needed start- but it is a bit of an Irish solution to an Irish problem.

For now- the prognosis is a continued exodus by smaller landlords from the sector- and the hastening of a recent number of high profile repossessions of multiple units by receivers- I see two new repossessions orders granted for 160 homes in the Dublin area on Thursday and Friday of this week alone- including one block of 48 in a fairly prestigious address location............

Ireland would do well to look at what is happening in Belgium, France and Germany- and put together a hybrid version of legislation- combining the best aspects of these- into legislation that suits Irish needs- our current legislation- suits no-one.

Wanderer78

This situation is getting worse day by day. There's simply no words for it anymore. This whole eu thing is a wrecking ball. Apologies op but I've no advice. Best of luck with it

The_Conductor

Wanderer78 wrote: »

This situation is getting worse day by day. There's simply no words for it anymore. This whole eu thing is a wrecking ball. Apologies op but I've no advice. Best of luck with it

This whole EU thing?
What do you mean- what are you talking about?
The Irish problems- are almost uniquely Irish in nature- the EU Commission bring delegations over here to study the Irish situation- particularly from Poland and Romania recently- to study and learn from Irish mistakes.
The mess in Ireland- is an Irish created mess- its pretty much nothing whatsoever to do with the EU...........

Wanderer78

The_Conductor wrote:

This whole EU thing? What do you mean- what are you talking about? The Irish problems- are almost uniquely Irish in nature- the EU Commission bring delegations over here to study the Irish situation- particularly from Poland and Romania recently- to study and learn from Irish mistakes. The mess in Ireland- is an Irish created mess- its pretty much nothing whatsoever to do with the EU...........

Our housing issues are not entirely home grown. We're heading into a very scary place regarding housing. Eu strings are killing us. You have to realise bail outs and austerity are a scam. Not being able to control your own monetary systems is a debt trap! We're spiralling out of control regarding housing.

The_Conductor

Wanderer78 wrote: »

Our housing issues are not entirely home grown. We're heading into a very scary place regarding housing. Eu strings are killing us. You have to realise bail outs and austerity are a scam. Not being able to control your own monetary systems is a debt trap! We're spiralling out of control regarding housing.

Bailouts and austerity- I'm sorry- we've only our politicians- and our bankers- to blame for that one........... Blaming the EU for our housing issues- is just trying to find a convenient scapegoat- this one is on us. Irish policies- have been to divest ourselves of public housing- at up to a 40% discount to market prices- in the name of enabling council and local authority tenants- own their own property.

No other country in the world has had policies akin to ours (I'm not talking solely about divesting ourselves of public housing and abdicating responsibility for supplying accommodation to those incapable of accommodating themselves- to the private sector)- and in no other country is renting held up as a deep and dark secret- in the manner in which it is here.

Its probably more appropriate to start a discussion on how we've ended up in this mess- separately to this thread- but I assure you- pointing our fingers at the EU- suits politicians down to the ground- they then don't have to own up and take responsibility for the actions and inactions of the Irish political classes- who most assuredly- were the primary cause in all of this........

If you're bored- read Peter Bacon's housing reports. He predicted precisely the current situation- fully 20 years ago- long before austerity, the bailout etc etc. It was expedient to shelve his report- and indeed commission a further 5 reports- until they ended up with a report innocuous enough- that it suited the politicians.

We really caused a lot of this ourselves- sure we can point fingers and try to find an external scapegoat(s)- but a large chunk of this is totally on ourselves............

Wanderer78

The_Conductor wrote:

Bailouts and austerity- I'm sorry- we've only our politicians- and our bankers- to blame for that one........... Blaming the EU for our housing issues- is just trying to find a convenient scapegoat- this one is on us. Irish policies- have been to divest ourselves of public housing- at up to a 40% discount to market prices- in the name of enabling council and local authority tenants- own their own property.

Your right I'm wrong. Later

The_Conductor

Moved from 55% rent increase thread- as it was in danger of derailing the OP's thread. Usual forum rules apply.

regi3457

alberttatlock wrote: »

Letter received from property agency acting on be half of receivers for our apart block located D1. (previous owners subject to receivership) .

90 day notice of rent increase - up 600 euro pm from 1, 100 to 1, 700 for 2 bed D1. (55% up)
3 examples of other apartments in the area with same market value.

We are a single salary family with 2 young children aged 4 and 2. Just sorted out infant and preschool for both. We've lived in the building the last 5 years and consider ourselves exceptional tenants and have paid over 60k in rent for building to date.

I understand that the agency has followed regulation, but 600 euro......We are sickened as this has turned our lives upside down......Any one else suffered similar increase ?

Sorry to break it to you, but rental price increases in Dublin have been strategically manipulated so that maximum extraction can take place from ordinary tenants. This "economic model" dictates that the tenant must pay more of his wage to rent leaving less income for other necessities in life delaying prosperity and keeping society in debt and borrowing thereby creating more wealth for banks. This is one big way in which wealth is channeled from families such as yourselves to a small but very happy elite.

regi3457

Straight Edge Punk wrote: »

€1700 per month for a 2 bedroom apartment? Is this really the state of the rental market right now?

Yes why not, so long as they can still afford to eat

regi3457

handlemaster wrote: »

OP what do you want ? Its the market rate. Would you sell your car for 5000 when the market value is 8000.. why should the landlord sub your family ?

market rate is manipulated to benefit the wealthy not the tenant

regi3457

FortySeven wrote: »

At what point do we say that market value is too much? When the hotels are cheaper? When people live in their cars?

Sorry to hear your trouble op. Not much you can do really. Shocking state of affairs and I hope you get through it without too much upheaval.

Unfortunately being a good tenant that has paid tens of thousands means nothing. There is money to be made and your family doesn't matter to those making it.

It is incredible that a 2 bed flat costs more than my monthly full time net pay. This won't end well.

it won't end well for you and most others but when has that stopped people making a lot of money?

Macha

Macha wrote: »

In Belgium where I rent, you can only adjust the rent according to a national index and only every 3 years. The Irish rental market is an absolute mess and the lack of basic regulations like these are a large part of the problem. Applying simple free-market economics is ridiculous and not the case in the vast majority of European countries. Hell, my rental deposit goes into a back account in my name and I earn the interest off it.

In Belgium, landlords can increase to market levels only every nine years (2 x 3 year renewals) or if tenant leaves before. Tenants take the apartments long term, usually staying the full 9 years or longer and can only break every 3 years unless they get a special (more expensive) clause inserted in their agreement at the start. The apartments are let out bare, no furniture, often no kitchen stuff and tenant moves in their own items. The condition of the apartment is noted in detail before renting (etat de lieu) and it is expected that at the end of the rental period the apartment is given back in identical condition. The tenant is responsible for all routine repairs, landlords responsibility is limited to things like gas checks.
There is no income tax payable on the rents received. The property tax (cadastral) meets the landlords tax liability and also theres no capital gains tax if the apartment is sold.

So you see, its a completely different system with advantages for both the landlord and long term tenant.

regi3457

MarkAnthony wrote: »

While I understand and sympathise, and also charge (slightly) under market rate for my own place as I've excellent tenants, receivers are under a legal duty to obtain market rates.

Even if the receiver was a saint they have to charge market rate.

market rate... what does that even mean and who controls that?

The_Conductor

regi3457 wrote: »

market rate... what does that even mean and who controls that?

Market rate is what the landlord can achieve were he she to offer the property on the open market. From looking at Daft- the OP's offer- ridiculous though it sounds- could very well still be under open market rates.

regi3457

The_Conductor wrote: »

Market rate is what the landlord can achieve were he she to offer the property on the open market. From looking at Daft- the OP's offer- ridiculous though it sounds- could very well still be under open market rates.

yes I know that it means that but what does it really mean? what controls market rates? Some people will say supply controls it.. but who controls that?

The_Conductor

regi3457 wrote: »

it won't end well for you and most others but when has that stopped people making a lot of money?

The Revenue Commissioners are the main beneficiaries in the rental sector- though it suits politicians to point their fingers at landlords. If a private landlord has been prudent and paid down loans on their rental property- they can now expect to pay up to 54% tax and levies on the property- on top of regulatory charges etc.

It is not treated akin to any other business by the Revenue Commissioners- its a cash cow- on which 1.8 billion was paid to the Irish exchequer last year- mostly by small landlords (the larger ones- including the vulture funds and the REITs often get away without paying any tax at all).

regi3457

Alf Veedersane wrote: »

Yeah but the market rate is being manipulated by the lizard people...

exactly, it is like everyone has a disease and the only people who make the drug to treat it tell you how much it costs

The_Conductor

Alf Veedersane wrote: »

Yeah but the market rate is being manipulated by the lizard people...

Alf- please read and comply with the forum charter- if you wish to post in the Accommodation and Property forum.

regi3457

did someone delete all the posts? there is like a whole page missing

The_Conductor

regi3457 wrote: »

did someone delete all the posts? there is like a whole page missing

Regi- your missing posts- along with a plethora of other posts- have been hived off into their own thread- as the discussion veered sharply away from the OP's original question. Two posts which failed to comply with the forum's charter were also deleted (one of which was yours).

regi3457

The_Conductor wrote: »

Regi- your missing posts- along with a plethora of other posts- have been hived off into their own thread- as the discussion veered sharply away from the OP's original question. Two posts which failed to comply with the forum's charter were also deleted (one of which was yours).

Ok will read that charter again. Sorry about that!

Del2005

regi3457 wrote: »

yes I know that it means that but what does it really mean? what controls market rates? Some people will say supply controls it.. but who controls that?

The people purchasing control market rate. If a someone offers a product or service for x and someone offers x+200 then x+200 is the rate, similarly if the only offer is x-200 then that's the rate.

It's only a few short years since people where posting here how they got significant rent reductions from their LL as the market rate was lower than what their lease had. We didn't see the government interfering with the rental market then even though most LLs were making significant looses.

newacc2015

Macha wrote: »

In Belgium where I rent, you can only adjust the rent according to a national index and only every 3 years. The Irish rental market is an absolute mess and the lack of basic regulations like these are a large part of the problem. Applying simple free-market economics is ridiculous and not the case in the vast majority of European countries. Hell, my rental deposit goes into a back account in my name and I earn the interest off it.

In Belgium were tenants able to negotiate massive rent reductions? I know people who were able to talk their rent down from €1700 a month to €1050 in 2010. I cant imagine any other developed country saw rents collapse so much in recent years.

I imagine not saying a rent increase of 55% is acceptable. But you didn't hear anyone moaning when rent basically dropped by a third overnight 2011/2012. I imagine with Belgium legalisation landlords have some protection over collapsing rents which Irish Landlords dont

Regulation is grand for large companies like pension funds or insurance companies. But I cant see why any sane individual would want to own property with some of the laws being suggested. You can buy shares with 5/6% yield and not have to do a tap of work. Why would buy Irish property with minimal landlord protections against non-payment etc and receive the same yield?

newacc2015

newacc2015 wrote: »

You can buy shares with 5/6% yield and not have to do a tap of work. Why would buy Irish property with minimal landlord protections against non-payment etc and receive the same yield?

Because there is no culture of investing in Ireland. Everytime somebody gathers a small nest egg together all they think of is using it as a deposit to buy a house.

regi3457

The_Conductor wrote: »

If a private landlord has been prudent and paid down loans on their rental property- they can now expect to pay up to 54% tax and levies on the property- on top of regulatory charges etc.

can you elaborate on this please?

regi3457

newacc2015 wrote: »

I imagine not saying a rent increase of 55% is acceptable. But you didn't hear anyone moaning when rent basically dropped by a third overnight 2011/2012.

why did this happen overnight?

Macha

Deleted User wrote: »

In Belgium, landlords can increase to market levels only every nine years (2 x 3 year renewals) or if tenant leaves before. Tenants take the apartments long term, usually staying the full 9 years or longer and can only break every 3 years unless they get a special (more expensive) clause inserted in their agreement at the start. The apartments are let out bare, no furniture, often no kitchen stuff and tenant moves in their own items. The condition of the apartment is noted in detail before renting (etat de lieu) and it is expected that at the end of the rental period the apartment is given back in identical condition. The tenant is responsible for all routine repairs, landlords responsibility is limited to things like gas checks.
There is no income tax payable on the rents received. The property tax (cadastral) meets the landlords tax liability and also theres no capital gains tax if the apartment is sold.

So you see, its a completely different system with advantages for both the landlord and long term tenant.

You can renegotiate the rent every 3 years of your 9 year lease (explained here, if you read French) but yes, I agree it's a totally different system. But it's also a much better system so why don't we have it in Ireland, or at least elements of it? I also lived in another European country where my deposit was kept in a blocked bank account where I got the interest. OK, it wasn't much but it's the principle of the matter that the money isn't just handed over to the landlord for however many years of rental.

The lack of income tax on rent in Belgium is scandalous and is the one part of the system I would absolutely change.

newacc2015 wrote: »

In Belgium were tenants able to negotiate massive rent reductions? I know people who were able to talk their rent down from €1700 a month to €1050 in 2010. I cant imagine any other developed country saw rents collapse so much in recent years.

I imagine not saying a rent increase of 55% is acceptable. But you didn't hear anyone moaning when rent basically dropped by a third overnight 2011/2012. I imagine with Belgium legalisation landlords have some protection over collapsing rents which Irish Landlords dont

Regulation is grand for large companies like pension funds or insurance companies. But I cant see why any sane individual would want to own property with some of the laws being suggested. You can buy shares with 5/6% yield and not have to do a tap of work. Why would buy Irish property with minimal landlord protections against non-payment etc and receive the same yield?

The problems in Ireland are largely due to rental regulation, which leaves both landlords but particularly tenants in very vulnerable positions. But of course Belgium doesn't see the huge price hikes and drops that the Irish property market has seen because of the goverment's other policies to stabilise the market.

It's in both of these areas that successive Irish governments have failed.

quadrifoglio verde

What happens if you don't pay your rent in Belgium? How long can you stay without being evicted

Macha

Macha wrote: »

The lack of income tax on rent in Belgium is scandalous and is the one part of the system I would absolutely change.

It keeps supply up and removes the pressure for rent increases.

The Belgian system produces 'hands off' landlords as they dont have to do minor maintenance and they get back the apartment (maybe after decades) in a condition ready to rent out again.

Belgium has a policy to encourage private investment and wealth creation in general. There is only a fixed 25% tax on dividends and no capital gains tax. The result is that by retirement people are better able to take care of themselves and their families.