Rent rises - what can the Gov do about it?

blanch152 · 28-11-2022 5:23pm

https://www.boards.ie/discussion/2058272804/rent-rises-what-can-the-gov-do-about-it

It is all linked.

Say you own 5 properties. You want rent of €8,000 a month to cover repayments and refurbishment and tax. That would normally mean an average rent of €1,600 a month. However, the delays in evictions are such that you have found that on average you lose about 12 months rent each year from those properties due to difficulties evicting tenants that don't pay or do serious damage to the properties. As a result you charge €2,000 per month to make sure you break even on the deal. In a good year, when you have 0 problem tenants, you do well, in a bad year with 3 or 4 problem tenants you lose big.

The net result is that rents are 25% higher than they should be because of the difficulties in securing evictions, so it is not another matter that landlords should be able to evict the non-payers in weeks rather than months, instead it is key to bringing rents down.

Sam Russell · 28-11-2022 7:00pm

Rents are higher than they should be because of lack of supply.

It is this lack of supply that allows landlords to borrow money to buy properties that repayments more than pay the repayments.

If the rent is paid and tenants create no problems, then you argument fails. The RTB needs to be fully staffed and given sufficient powers to enforce the rules.

Gumbo · 28-11-2022 8:38pm

Stop rent rises in conjunction with a fairer tax system for landlords.

Id sign up for that.

blanch152 · 29-11-2022 9:42am

https://www.boards.ie/discussion/comment/119932465#Comment_119932465

Of course if rent is paid and tenants create no problems, then my argument fails.

However, we live in the real world, and there are huge problems with unpaid rent and tenants creating problems and destroying property.

As a result, rents are higher, that is the truth.

Sam Russell · 29-11-2022 9:59am

https://www.boards.ie/discussion/comment/119934242#Comment_119934242

Yes, but that's because there is no quick reliable way of evicting such tenants. The RTB needs to be resourced properly, and have a rapid response to such matters.

They also need to bring action against errant landlords.

blanch152 · 29-11-2022 10:07am

https://www.boards.ie/discussion/comment/119934318#Comment_119934318

Until the issue of eviction is addressed, there will be a significant premium built in to rents. It is probably the biggest factor in the above-average rents.

29-11-2022 10:30am

supply is the issue

landlords who feel entitled to charge a rent that covers all of their costs (including full cost of finance) each month, leaving them with a property paid for without any investment themselves, can only exist in a market where tenants aren't free to move to other properties.

any landlord who runs their costs in this way without reference to the fact that they come out with an asset worth hundreds of thousands of euros at the end of the mortgage is either pretend clueless or clueless but either way they ought not to be treated seriously

ELM327 · 29-11-2022 10:39am

https://www.boards.ie/discussion/comment/119932888#Comment_119932888

And a timely eviction method. If I had a choice between a tax reduction or a proper eviction method as a LL I'd take the latter. Between 20% and 30% of the rent you pay is likely a bad debt provision.

29-11-2022 10:48am

Rentals in Ireland are already highly regulated. Every time there has been government intervention it has resulted in landlords leaving the market which restricts the number of units available and results in higher rents. The only way for rents to come down is to have competition either by encouraging building with government funds or by making the market more appealing for small investors to come back. A review by the RTB has said that a further 20% of landlords intending leaving over the next 5 years. The current government don't want to provide incentives to landlords as they have managed to convince the public that they are enemy number 1 and their greed is responsible for the current crisis, they cant now be seen to offer them supports. A lack of strategic government spending has resulted in this crisis and they need to get the finger out before they allow it to get worse.

Gumbo · 29-11-2022 10:58am

https://www.boards.ie/discussion/comment/119934472#Comment_119934472

100%.

2 years to get rid of unruly tenants at the moment. All the while they are not paying rent.

Rapid action by the RTB for both sides is a win win. Go after bad tenants and landlords equally.

Sam Russell · 29-11-2022 11:01am

What happens to the property after the landlord leaves the market?

A) it is sold to an owner occupier, and therefore is one more tenant off the market.

B) it is left vacant - perhaps, but unlikely to be widespread

C) it goes in for short term rental like AirBNB. If that is widespread, it needs regulation beyond the current futile level.

Most landlords are probably just cashing in their capital gain.

awec · 29-11-2022 11:04am

It's a vicious cycle that's tough to break, as someone said already in the thread. There's no easy fix.

Rents are high cause supply of rental properties is low. To increase rental supply, you need to either:

Encourage more landlords into the market - this means more people buying houses, which already has supply issues, so house prices for private buyers goes up
Build more social housing - you cannot build more social housing without building less private housing, therefore prices goes up. Ireland is pretty much topping out on construction output right now, no builder is sitting at home looking for work.

At the end of the day, it's possible to fix rents, but not without shafting someone else. There is no magic solution where there is no losers.

There's a strong anti-landlord sentiment in certain parts of Irish society, but I think it may now be sinking in that when landlords get hit it's renters who take the brunt of the pain. Landlords can just sell up and bank their money, renters are the ones left paying through the arse for somewhere to live.

awec · 29-11-2022 11:14am

https://www.boards.ie/discussion/comment/119934565#Comment_119934565

The problem with point A is rental properties tend to be more densely populated than owner occupied.

E.g. a 3 bed apartment is likely to have 3 tenants, but it's very unlikely 3 friends would go together to buy a 3 bed apartment. It's more likely you'd get a couple living by themselves.

The Spider · 29-11-2022 1:28pm

We’ll you can’t have property rights if you don’t own property? Of course it favours landlords/owners, you may be referring to a right to housing which would require a referendum to dilute the property rights of owners, and the chances of that passing in a country where over 70% own property are non existent

Sam Russell · 29-11-2022 3:09pm

Property rights can be a bit wider than that such rights only apply to owners.

If I rent a property on a three year lease, I should have the same rights as an owner for those three years - such as the right to privacy within the property and the right to exclude the owner from the property. I should have the right to enjoy the property as I see fit. (Obviously within li do with anti-social behaviour).

The landlord should have the right to receive the rent, and be assured the property is being minded and not damaged.

The Spider · 29-11-2022 5:26pm

https://www.boards.ie/discussion/comment/119935736#Comment_119935736

That would fall under tenant rights rather than property rights, property rights have always fallen on the side of ownership everywhere. An owner can’t enter a property as it stands now without permission from the tenant, everything you’ve asked for here is already covered under legislation.

blanch152 · 29-11-2022 6:11pm

https://www.boards.ie/discussion/comment/119935736#Comment_119935736

The problems in the rental market are less in the UK. Why?

Because of two things

(1) Letting agents can look for work references and landlord references as part of the letting procedure.

(2) Evictions for non-payment are easier.

Bring these measures to Ireland and the pressure on rents will ease. Those who serially wreck properties will have a problem though.

Sam Russell · 29-11-2022 7:22pm

https://www.boards.ie/discussion/comment/119936231#Comment_119936231

Except eviction if the owner needs the property. Or right to a new lease. Or right to a fair rent. Or .... well lots of rights.

DownByTheGarden · 30-11-2022 1:20pm

https://www.boards.ie/discussion/comment/119935736#Comment_119935736

Maybe if a lease applied equally to both parties you might have a chance. Why cant two parties agree say a one year lease and then after the year is up they both are free to agree another lease together or both walk away like they agreed to. What we have in Ireland is that a lease is not worth the paper it is written on to a landlord.

ELM327 · 30-11-2022 1:24pm

People need to decouple ownership of property with the right to a home. The two are mutually exclusive. You can have a property at your use for 60 years and not own it - and equally you could own a property for 60 years and not live in it.

30-11-2022 9:18pm

https://www.boards.ie/discussion/comment/119928359#Comment_119928359

as people still need to be housed no matter what, making people homeless isnt a solution, even if tenents wreck places.

Nonnsense. If people behave like animals when in a rented place, then they have no right to be housed again by landlords or the Councils. Let them sleep outdoors along with the other animals. Or even better, place a bunch of damging thugs in where you live. See if you are still part of the bleeding heart brigade after a few weeks of your home trashed.

Hotblack Desiato · 01-12-2022 10:22am

Maybe they should be concentrated in some sort of a camp, keep them all in the one place like. 🙄

ELM327 · 01-12-2022 10:28am

https://www.boards.ie/discussion/comment/119943435#Comment_119943435

(obviously aware of the ridiculous link youre making)

I've often postulated that there is a small number within society that should be sent to a small offshore island for the good of the country.

Sam Russell · 01-12-2022 10:37am

https://www.boards.ie/discussion/comment/119943458#Comment_119943458

Like Spike Island?

Emblematic · 01-12-2022 3:28pm

https://www.boards.ie/discussion/comment/119934576#Comment_119934576

@awec wrote: "1. Encourage more landlords into the market - this means more people buying houses, which already has supply issues, so house prices for private buyers goes up"

I think we need to be careful however of the quality of those landlords that are encouraged into the market. Each house that is purchased by a landlord is also one that could potentially be providing a home for a first time buyer or someone trading up. With that property now in the hands of a landlord, it is unavailable to purchase and that potential buyer now needs to rent thereby pushing up rents.

This is not so bad if the landlord is going to provide long-term secure family accommodation but often this does not happen and the tenant can be evicted to house a landlords family member or the landlord himself, or the tenant can be evicted to sell the house, or other reasons for which the tenant is not to blame.

It is not so much landlords we need but rather secure affordable long-term rental units as an alternative to purchasing.

Hotblack Desiato · 01-12-2022 6:59pm

https://www.boards.ie/discussion/comment/119943458#Comment_119943458

Whooosh

Good loser · 02-12-2022 1:12am

https://www.boards.ie/discussion/comment/119945019#Comment_119945019

We need rental units - but not landlords. Isn't that contradictory and absurd?

In my opinion the more landlords we have the better, as that means there are more units available for rent. This country operated for years without any interference in the market by the State. The State has now interfered apparently 6 times in the rental market in the last three years and what improvement has that made. The more the State protects tenants in situ the less units come on the market disadvantaging those seeking tenancies. Why should the State favour existing tenants over potential tenants; they are all citizens equal under the law.

Sam Russell · 02-12-2022 10:26am

https://www.boards.ie/discussion/comment/119947175#Comment_119947175

The state had a history of building houses from the founding of the state. The Tenters area in Dublin 8 is 100 years in existence - built by the state as a tenant purchase scheme. People moved from tenements into two story three bedroom well constructed houses. Marino was another excellent scheme. The major building of council houses in the 1950s to the 1970s in Ballyfermot, Finglas, Walkingstown, Ballymun, etc. provided a huge number of people living in Dublin in poor quality housing to be provided with decent affordable houses.

All this stopped in the 1980s for political reasons favoured by FF and FG.

Private landlords, as a section of the market, were not a major player in the provision of housing - it was private ownership funded by mortgages, or council houses provided by the Corpo in Dublin's case.

Private landlords have flourished on the back of rising house prices. Many funded by interest only mortgages that relied on rising prices.

.

02-12-2022 11:55am

Same old arguments being banded about. If ye want to fix it hound your elected representative, boards isn't going to be able to fix it for you.

Don't want to have to pay landlords the market rate for rent, but want to live in high demand areas.

Wants high standards of accommodation, doesn't want to pay high prices.

Doesn't want the landlords to have any say or control over their asset worth hundred of thousands.

Wants the landlord to be held to account for bad tenants.

Want landlords to sell up but also want more rental units on the market to drive prices down.

Existing legislation shrinks rental market and drives up prices, wants further legislation to reduce prices.

Want professional landlords only as they will fix all the issues with the rental market, professional landlords bulk buy properties and leave them empty to drive up prices.

Its not rocket science, more of the same is only going to make renting worse and radical fixes are required.

Hotblack Desiato · 02-12-2022 11:59am

https://www.boards.ie/discussion/comment/119945019#Comment_119945019

It really doesn't matter who is living in a house - an owner occupier, tenant, the former landlord's cousin - as long as the house is being lived in.

An empty house means that a house somewhere else is needed to house the family that could have been accommodated in this one.

Until very recently the Fair Deal nursing home scheme operated in a bizarre fashion which massively incentivised leaving an elderly person's house empty until they died.

Emblematic · 02-12-2022 1:10pm

https://www.boards.ie/discussion/comment/119948243#Comment_119948243

I agree with you that having someone live in a house is far better than having it empty. My point, however, was that if a landlord can't provide long-term secure accommodation then, in many cases, it is better that he sell so that either someone else can provide it or an owner-occupier buys it.

Emblematic · 02-12-2022 1:21pm

https://www.boards.ie/discussion/comment/119947175#Comment_119947175

I would agree with that to a certain extent. But remember that every house bought by a landlord is one no longer available to buy by a first-time buyer or someone trading up. Therefore as well as creating supply they are also creating demand. This is fine if what they are providing a quality service, as I have mentioned in the post above, but if not, they are merely getting in the way. Had they not bought that property to rent, someone might be living in it in a way that would allow them to bring up a family, plan for the future etc.

That is not to say all landlords are bad. Far from it. But below a certain standard, it is better that some landlords sell up and get out of the market for the good of the housing situation and society.

Flinty997 · 02-12-2022 2:29pm

https://www.boards.ie/discussion/comment/119948597#Comment_119948597

The current housing crisis would suggest your wrong about it creating supply.

People want smaller LL out and large investment LL in. Well you've got what you wanted. Hows it working out.

Emblematic · 02-12-2022 3:08pm

https://www.boards.ie/discussion/comment/119949030#Comment_119949030

I'm not sure I follow you. What is wrong with suggesting that high quality landlords (regardless of size) should stay in the market and that poor quality ones should leave?

Flinty997 · 02-12-2022 3:15pm

https://www.boards.ie/discussion/comment/119949240#Comment_119949240

The issue is supply. You're reducing it.

Emblematic · 02-12-2022 3:23pm

https://www.boards.ie/discussion/comment/119949277#Comment_119949277

Yes but rental supply can't be treated in isolation. Rental supply takes from availability of units to buy. The lack of units to buy increases the number of people forced to rent. This is the point you are not addressing. No one is saying that there should be no landlords but rather that the quality of those landlords is important too.

Flinty997 · 02-12-2022 3:32pm

https://www.boards.ie/discussion/comment/119949322#Comment_119949322

Rental supply is also the units still in the market. More are leaving than are entering it.

Raising the bar on quality while desirable, does the same.

Death of a thousand paper cuts.

02-12-2022 5:50pm

https://www.boards.ie/discussion/comment/119949322#Comment_119949322

Yes but also people are also being forced into buying because rents are so high.

If rents were more reasonable people would be happier to rent for longer.

Lots of people also have to rent or need to rent.

Supply of accommodation to both rent and buy is required.

Also about the "quality of the landlords". You can worry about that when lots of rentals are available, not before.

Emblematic · 02-12-2022 6:44pm

https://www.boards.ie/discussion/comment/119950019#Comment_119950019

I would argue that overall units built is the key metric that needs to increase. To a certain extent, whether they are to rent or to buy is of secondary importance. If, for example, you produced 10,000 units strictly to sell to FTBs (and I'm not saying this should be done), many of those FTBs would otherwise need to rent if those units had not been built hence easing the pressure on the rental market.

@Topgear on Dave wrote: "Also about the "quality of the landlords". You can worry about that when lots of rentals are available, not before."

This is why the quality of landlords is still important even in a situation of supply shortage such as at present. Removal of a poor quality landlord at least frees up a house to be either bought by a higher quality landlord or an owner-occupier. The overall accommodation situation in Ireland is thereby improved despite the short supply.

Flinty997 · 02-12-2022 7:41pm

A rental bought by an owner occupier results in less accomodation space. You don't seem to be grasping that. Landlords leaving are not being replaced by landlords irrelevant of quality. So rental space shrinks further. Higher quality rentals are more expensive and higher rents.

Less rentals and higher rents is how we got here.

"...doing the same thing over and over again and expecting different results..."

It's the same with building new supply. No compromise attitude means it's too expensive to build in the numbers we need. In the meanwhile we have people living in tents.

Emblematic · 02-12-2022 7:52pm

https://www.boards.ie/discussion/comment/119950382#Comment_119950382

Not necessarily. It depends on the amount of people that owner occupier will have living in their house, the size of their family and so on. And, even if they have fewer in the house, this is likely to be the greater level of security they enjoy compared to that offered by a low quality landlord.

I'm not against landlords and believe there needs to be a mix of owner-occupiers as well as high quality rental units in a healthy market. But if landlords are of low quality, the market is better off if they sell up, get out, and stop blocking people from getting decent accommodation.

Flinty997 · 02-12-2022 7:57pm

Sometimes kids won't be told fire is hot. Go for it.

amacca · 02-12-2022 9:34pm

I'll probably be shown how wrong I am but tbh I'd be of the opinion the best thing the gov could do would be to stop meddling and making stupid populist policy decisions that make the rental situation worse..its all very well going after landlords with one sided regulation or introducing schemes that increase property prices because people that can't see further from the ends of their noses think it will help them to buy but I honestly think if they had stayed out of the market or tried to make it more affordable by building more housing it would be a better situation now....

From the time gov started getting rid of bedsits they've made an absolute balls of it.....instead of asking what can they do about rents I honestly think a better question might be when can we get them to feck off making decisions that keep rents going up.....

Murph85 · 02-12-2022 10:07pm

Incompetent morons, the situation is going to get much worse. Enugratimg if it's an option, is the best bet...

Good loser · 03-12-2022 12:44am

https://www.boards.ie/discussion/comment/119950878#Comment_119950878

Plus 1

Sam Russell · 03-12-2022 2:05pm

It is obvious that the solution is more houses.

So why do they not build them?

The Irish Glass Bottle site in Ringsend has been vacant for fifteen years - owned by Nama, a Gov agency. Yet still growing weeds, with not a sign of a crane or JCB.

[Edit:]

I know Nama have sold it, but they could have built the houses, or got DCC to build on it.