Rent freeze?

Grumpypants

CalamariFritti wrote: »

Shocker: landlords against rent freeze

What next tenants against rent increases.

I'd be behind a rent freeze at the rent cap. But the reality is you have people renting houses for €800 right next door to one renting for €1400. If you look to implement a rent freeze the guy in the €800 house will be bumped to 1400 right before the law passes and you end up rising the overall rent burden.

Assetbacked

The Student wrote: »

What does the landlord get out of a rent freeze?

I would not bet on a rent freeze only lasting a short term period, why would any new investor enter the market if they can't get the best return on their investment.

Rent freeze's don't work, it discourages new investment and also discourages reinvestment by existing landlords. What business logic is there to increase your spending on an asset were your return on investment decreases.

That does not make business sense.

The landlord has enjoyed a boom the past six years at the expense of renters who are getting poorer the longer this goes on, given the cost of insurance, transport, childcare, utilities, socialising has all shot up. It's not relevant whether a landlord benefits from a short-term rental freeze. RPZs are a joke, giving justification to increase returns by 4% each year which is exactly what suits the institutional landlords. The rental freeze with the rental tax credit will benefit a lot of renters.

Fol20

Assetbacked wrote: »

The landlord has enjoyed a boom the past six years at the expense of renters who are getting poorer the longer this goes on, given the cost of insurance, transport, childcare, utilities, socialising has all shot up. It's not relevant whether a landlord benefits from a short-term rental freeze. RPZs are a joke, giving justification to increase returns by 4% each year which is exactly what suits the institutional landlords. The rental freeze with the rental tax credit will benefit a lot of renters.

A lot of landlords didnt increase rent by 4pc and just left it as is until a new tenant moves in. Due to RPZ, this blocked them from doing this properly and forced them to increase it yearly so they could at least attempt to get market rate when a new tenant moves in.

You say ll have had a boom now for the past 6 years, what about the 6 years before this. I know of some ll that were in dire straights due to the recession and lost everything. Again this is a risk you have to take so we need to let it ebb and flow naturally.

I read an article a while ago that says rental costs have gone up by 24pc. So even with the past few years with record rents, we have also had record costs.

beauf

Assetbacked wrote: »

The landlord has enjoyed a boom the past six years at the expense of renters who are getting poorer the longer this goes on, given the cost of insurance, transport, childcare, utilities, socialising has all shot up. It's not relevant whether a landlord benefits from a short-term rental freeze. RPZs are a joke, giving justification to increase returns by 4% each year which is exactly what suits the institutional landlords. The rental freeze with the rental tax credit will benefit a lot of renters.

Thats what they said about RPZ and look how thats worked out.

Now repeating it with the Rent Freeze.

https://www.youtube.com/watch?v=Z4fBbhyzE9A

The only think that works is increased supply and reduced demand.
Have we fixed either? No.

RCSATELLITES

Renting out a property is a business. And like any other business if someone can't afford it, then you can't buy it. If the rents are too dear in Dublin then look for rental in Cavan or elsewhere. Rent is now at the price people are willing to pay. When the rent was low during the recession why did the government not subsidise the rent landlords were getting. If the government think they can put a rent freeze on properties then they can put a electricity freeze, a gas freeze, a mortgage interest freeze, a motor insurance freeze a price of car freeze a price of chicken freeze on everything. Because at the end of the day everything has gone up in price the last 6 years. But know they won't mess with big companies only the little landlords they take 50% off any profit already. Just so people know, in the uk the tenants have to pay council tax on top of their expensive rents and the council tax is more than £1000 on some properties for the year. While here the landlord has to cover the local property tax. That's already a saving for tenants, also most properties in the uk are unfurnished. So not only do landlord rent their houses we also rent out furniture to you the tenants.

RCSATELLITES

Assetbacked wrote: »

The landlord has enjoyed a boom the past six years at the expense of renters who are getting poorer the longer this goes on, given the cost of insurance, transport, childcare, utilities, socialising has all shot up. It's not relevant whether a landlord benefits from a short-term rental freeze. RPZs are a joke, giving justification to increase returns by 4% each year which is exactly what suits the institutional landlords. The rental freeze with the rental tax credit will benefit a lot of renters.

Did you comment when rents where less than half the cost they should of been during the recession. Did you care when rent was so low and landlords had to add more than half the rent they received to pay the mortgage on the property they where letting you live in.

handlemaster

CalamariFritti wrote: »

its not really an attitude and I dont think being a landlord is great. It is the bottom ladder / entry level of living off your assets rather than your labour. And like most bottom ladder things its tough. I only expressed my not being surprised that landlords don't like it. As in water is wet.

Having said that, if it is so bad why do it then?

Isn't that a lot of what investing is. Private pension s who do they work ?? Shares anyone ??

Assetbacked

RCSATELLITES wrote: »

Did you comment when rents where less than half the cost they should of been during the recession. Did you care when rent was so low and landlords had to add more than half the rent they received to pay the mortgage on the property they where letting you live in.

It's an investment property, the asset will be owned once the mortgage is paid so a turbulent 5 years in a longer term mortgage is nothing to cry about. A lot of people lost jobs and businesses in the recession. Since the bottom of the market, rents have rocketed far past salaries (which is relevant as renters are reliant on salaries for their income), meaning that for each year of rental increases, employees are getting poorer. That is absurd in a period of so-called growth.

RCSATELLITES

Assetbacked wrote: »

It's an investment property, the asset will be owned once the mortgage is paid so a turbulent 5 years in a longer term mortgage is nothing to cry about. A lot of people lost jobs and businesses in the recession. Since the bottom of the market, rents have rocketed far past salaries (which is relevant as renters are reliant on salaries for their income), meaning that for each year of rental increases, employees are getting poorer. That is absurd in a period of so-called growth.

I wasn't really complaining and that's how investments work they go up as well as down. But government are trying to freeze it now. Will they suppliment it if the rents decrease then like they do with the toll companies. Has to work both ways. I rent out a property in Longford. I bought it this year. The tenants had been renting it for €450 a month since 2012. I have now put the rent to €850. It's a 3 bed house. No one complained when it was €450 but now they complain when it's €850. 3 adults live in it. Surely even on the minimum wage of around €400 a week that's still reasonable.
"Rents have rocketed far past salaries" where is that in Dublin? I read an article that average salary in Google in Dublin is €100,000 so rent of €2000 between 2 people is realistic. Every city is expensive, and if you can't afford to live there then there are other counties and jobs elsewhere.

VonBeanie

Assetbacked wrote: »

It's an investment property, the asset will be owned once the mortgage is paid so a turbulent 5 years in a longer term mortgage is nothing to cry about. A lot of people lost jobs and businesses in the recession. Since the bottom of the market, rents have rocketed far past salaries (which is relevant as renters are reliant on salaries for their income), meaning that for each year of rental increases, employees are getting poorer. That is absurd in a period of so-called growth.

The eventual ownership of the asset, comes from the deposit the LL brings to the investment, and the capital mortgage repayments he/she makes. Its more like an enforced savings scheme than a present at the end of your business.

However you choose to view the profits available to landlords, the sad truth is they are not enough to encourage more people to become landlords, or even keep the landlords we have. Every year, the RTB will issue figures showing less landlords than the year before.

If you have more people wanting to rent, than people willing to let property, applying a rent freeze will not help, because it does not create more rental properties. It only protects sitting tenants, and that is at the expense of reduced security of tenure, as there is more incentive for their sitting landlord to sell up.

I count myself as lucky that I do not have to rent. I'm no longer a landlord either so this does not directly impact me. My view is that rent control causes rental inflation, by restricting supply. If you have 200 tenants looking to rent, and only 100 properties available, rent controls don't help.

beauf

Assetbacked wrote: »

....Since the bottom of the market, rents have rocketed far past salaries (which is relevant as renters are reliant on salaries for their income), meaning that for each year of rental increases, employees are getting poorer. That is absurd in a period of so-called growth.

The problem is wealth inequality

While living standards have risen modestly, the country finds itself faced with high income inequality and soaring wealth inequality, with our wealth inequality score increasing by over 10 points in the past five years......

...The high levels of wealth and income inequality is attributed to decades of prioritising economic growth over social equity, the WEF's report found.

https://www.independent.ie/business/irish/ireland-scores-well-on-growth-and-gdp-but-inequality-soars-36518158.html



Most LL only own one property and are decreasing in number. The companies with lots of properties are increasing in number. Single property landlords are leaving the market.

But people wanted the big professional landlords. Well you've got them.

Landlord “types” are also mapped, showing the highest proportion of “company” landlords, such as real-estate investments trusts (REITs) around the city centre and Tallaght. In the North Dock area, 485 of the 1,552 tenancies there registered with the RTB in June 2018 were to “company landlords”.

https://www.irishtimes.com/news/social-affairs/dublin-s-true-social-divide-is-revealed-by-housing-map-1.3556676

The UN report and letter by Leilani Farha said the situation was being made worse by land hoarding – investors sitting on vacant land to restrict supply and thus increase demand and value.

It also noted that private equity landlords, such as Ireland’s largest landlord, I-RES REIT, “have openly discussed policies of introducing the highest rents possible in order to increase returns for shareholders”.

https://www.thejournal.ie/un-ireland-housing-4682306-Jun2019/

Assetbacked

beauf wrote: »

The problem is wealth inequality



https://www.independent.ie/business/irish/ireland-scores-well-on-growth-and-gdp-but-inequality-soars-36518158.html



Most LL only own one property and are decreasing in number. The companies with lots of properties are increasing in number. Single property landlords are leaving the market.

But people wanted the big professional landlords. Well you've got them.




https://www.irishtimes.com/news/social-affairs/dublin-s-true-social-divide-is-revealed-by-housing-map-1.3556676




https://www.thejournal.ie/un-ireland-housing-4682306-Jun2019/

FG are only about serving big corporates. The people voted for what people were promised; abolishing the USC. It is astounding that FG have been getting away with not aboshing the USC despite the fact corporate tax income has exploded since they made that promise a number of years ago. My main point is that FG do serve the interests of big corporates first and foremost. I assume the idea is that the money trickles down but that is of course bull**** as has been proven.

beauf

It's interesting then, that when you complain about high rents you ignore how much of that goes to the govt in one form or another.

mgn

The government gets half the rental income after expenses, but the tenants never get know about that part.
This rent freeze is all populist bulls*it with an election coming up, how many of these TDs who voted for this have objected to housing projects in their areas or objected to high rise buildings, shower of muppets.

Assetbacked

mgn wrote: »

The government gets half the rental income after expenses, but the tenants never get know about that part.
This rent freeze is all populist bulls*it with an election coming up, how many of these TDs who voted for this have objected to housing projects in their areas or objected to high rise buildings, shower of muppets.

The populist parties like SF and Labour have politicians who are notorious for objecting to development in Dublin but all major political parties have candidates talking out both sides of their mouth on the issue.

Assetbacked

beauf wrote: »

It's interesting then, that when you complain about high rents you ignore how much of that goes to the govt in one form or another.

If it stayed in the bank accounts of workers instead of going to the government via rental taxes it would end up in the pockets of more local businesses who pay taxes so there is a non-point in your comment I'm afraid.

beauf

Well if tax isn't an issue for you as it's all the same this doesn't make much sense...

Assetbacked wrote: »

...A rent freeze combined with the rental tax credit would benefit people who are already in tenancies as they can budget better in the next couple years as the rent freeze only would last for a short-term period until supply picks up/immigration dies down. For those people, they would welcome it...

Everyone should just pay high taxes. It's all going into the same pot.

Well except the Reits who target the top end of the market with the highest yields. We welcome them with open arms.

beauf

Assetbacked wrote: »

If it stayed in the bank accounts of workers instead of going to the government via rental taxes it would end up in the pockets of more local businesses who pay taxes so there is a non-point in your comment I'm afraid.

This also seems to infer that private rentals are the same as local business. They shouldn't be treated differently because it's housing as had been suggested before. It's all just local business.

overkill602

Its a business when high taxation and risk is mentioned.
Regs, caps and rent freezes are the bad economics of populism
Provision of affordable social housing is the state's responsibility

The Student

Assetbacked wrote: »

The landlord has enjoyed a boom the past six years at the expense of renters who are getting poorer the longer this goes on, given the cost of insurance, transport, childcare, utilities, socialising has all shot up. It's not relevant whether a landlord benefits from a short-term rental freeze. RPZs are a joke, giving justification to increase returns by 4% each year which is exactly what suits the institutional landlords. The rental freeze with the rental tax credit will benefit a lot of renters.

What exactly is your point that landlords should not get the best return on their asset they can. That is the basic principle of a business. You want professional landlords don't you.

If you want professional landlords you take the rough with the smooth.

It never ceases to amaze me the lack of basic understanding of economics that poster don't understand.

As supply increase price falls, as supply falls price increases until equilibrium is found.

The market can't be controlled by outside forces, any interference by outside forces will result in market reacting accordingly. This is how markets work, and is the basic tenet of economics.

Assetbacked

beauf wrote: »

Well if tax isn't an issue for you as it's all the same this doesn't make much sense...



Everyone should just pay high taxes. It's all going into the same pot.

Well except the Reits who target the top end of the market with the highest yields. We welcome them with open arms.

I never said tax wasn't an issue for me. If we are staying on this point, the individual wellbeing would be better served by spending their cash on other things besides for rent. The wealth in the economy would be better spread if people weren't throwing it into property (which, with rent and purchasing, is dead money ultimately). Spreading wealth is key to healthy capitalism so I agree that REITs not paying their fair share of tax is toxic to healthy capitalism.

Assetbacked

beauf wrote: »

This also seems to infer that private rentals are the same as local business. They shouldn't be treated differently because it's housing as had been suggested before. It's all just local business.

Again, diversifying the wealth is better than creating a very similar situation to when we had the English landowners with the Irish tenant class.

beauf

Assetbacked wrote: »

Again, diversifying the wealth is better than creating a very similar situation to when we had the English landowners with the Irish tenant class.

Bit it's not diversifying. It's doing the opposite.

Lots of people with one property suggests average incomes. Lots of different people. This is changing to fewer landlords/business's, but those that are left have lots of properties as in very wealthy. So fewer people. Maybe funded externally I have no idea.

Property prices and rents will eventually stall. They say it's all these policies eventually working, perhaps even the shift to larger landlords. But it won't be. They've had 20yrs to work and didn't. It will just be supply increasing. But ownership will have had paradigm shift. Perhaps out of Ireland too.

Interesting times ahead.

Assetbacked

beauf wrote: »

Bit it's not diversifying. It's doing the opposite.

Lots of people with one property suggests average incomes. Lots of different people. This is changing to fewer landlords/business's, but those that are left have lots of properties as in very wealthy. So fewer people. Maybe funded externally I have no idea.

Property prices and rents will eventually stall. They say it's all these policies eventually working, perhaps even the shift to larger landlords. But it won't be. They've had 20yrs to work and didn't. It will just be supply increasing. But ownership will have had paradigm shift. Perhaps out of Ireland too.

Interesting times ahead.

I don't think we actually disagree to be honest. I think we both have our red rags that we lurch for but fundamentally agree. I agree with all of your comment here.

beauf

I'm not sure you get that is a symbiotic relationship here. That in fixing one side and neglecting the other side it's destroying both.

meeeeh

The Student wrote: »

The market can't be controlled by outside forces, any interference by outside forces will result in market reacting accordingly. This is how markets work, and is the basic tenet of economics.

Yeah that was the logic during industrial revolution or for example Irish famine. Let market feed the people and when enough people die or leave then there will be enough food for remainder.

In practice market isn't left only to the control of outside forces for a long time now. You have to pay minimum wage, products or work conditions have to be at certain standard. Energy prices are regulated, even taxi fares are regulated. We regulate all sorts of markets because not regulating them would put society back centuries. Why do you expect housing unlike anything else should be regulated like in 18th century.

beauf

meeeeh wrote: »

Yeah that was the logic during industrial revolution or for example Irish famine. Let market feed the people and when enough people die or leave then there will be enough food for remainder.

In practice market isn't left only to the control of outside forces for a long time now. You have to pay minimum wage, products or work conditions have to be at certain standard. Energy prices are regulated, even taxi fares are regulated. We regulate all sorts of markets because not regulating them would put society back centuries. Why do you expect housing unlike anything else should be regulated like in 18th century.

You're selectively quoting out of context.

He's saying that if you interfere with the market it will respond accordingly. However suggesting that those manipulations and regulations will have an opposite effect to all previous experience doing exactly that same thing is deluded.

We don't need to look elsewhere for examples. We already repeated the same manipulation and one sided regulations and got the same results.

The Student

meeeeh wrote: »

Yeah that was the logic during industrial revolution or for example Irish famine. Let market feed the people and when enough people die or leave then there will be enough food for remainder.

In practice market isn't left only to the control of outside forces for a long time now. You have to pay minimum wage, products or work conditions have to be at certain standard. Energy prices are regulated, even taxi fares are regulated. We regulate all sorts of markets because not regulating them would put society back centuries. Why do you expect housing unlike anything else should be regulated like in 18th century.

Energy prices are regulated because you have a limited number of suppliers and they control the market. This ensures a balance between buyer and seller.

The property market is not the same as you have thousands of suppliers. Over regulation is going to destroy the rental market.

You need to differentiate between a market and a sector. A market should be allowed find its equilibrium. A sector contains those who should not be in the market, eg those who require social housing.

But sure hey you want the sector regulated even more, the recent RTB reports show the exodus of landlords over the recent past should indicate the effect of the Govt strategies.

New supply of rental is at the top end of the market, landlords leaving the market are selling to owner occupiers so cheaper bed spaces are being replaced with more expensive bed spaces at the top end of the market.

If this is not evidence that increased regulation is not working than I don't know what is. But yeah feel free to call for increased regulation and see what happens.

The property market (not sector) will react accordingly.

Be careful what you wish for because when you get it and you realise its not what you thought it would be there may be no going back.

meeeeh

Talk about being melodramatic. Rental market can ask for higher prices because of lack of supply. There is also lack of housing supply for anything. Thinking that allowing prices to spiral into the sky and leave it to the market to fix is deluded. Or you could end up importing Polish builders to build houses the same Polish builders would need to rent for market to work and make return for donkeys who watch couple of property programmes at tea time and decide they could be property investors.

Personally I don't believe social housing should be left to private sector to deal with but at the same time private sector should be properly regulated and professionally led. I'm not actually in favour of rent freeze but I am in favour of rent control. It should not encourage amateurs who need constant stream of rent into their account to actually meet their mortgage repayments.

beauf

meeeeh wrote: »

....Thinking that allowing prices to spiral into the sky and leave it to the market to fix is deluded. ....

This is not whats being said.
Its also not what happening. Its had constant tweaking for decades.
The aim being to attract foreign and corporate investment.

The market is as some people wanted it to be.