The Irish housing market is struggling with a rise in homelessness, with 11,500 people forced to use emergency accommodation in December 2022 alone. The Economic & Social Research Institute (ERSI) found that 100,000 households are using some form of state support to rent from private landlords, as rental prices have risen by 90% compared to 2010. As a result, many young people are forced to live at home longer. The majority of rental properties in Ireland are provided by small, individual investors, who have been leaving the market due to high taxes and ever-changing legislation, pushing up rent prices.
Although a temporary eviction ban was introduced in October 2022, it expired at the end of March 2023. Despite opposition politicians calling it “cruel and heartless,” Mark Rose, the managing director of Rose Properties in Cork, argued that it was a ban on selling a property. He believes that more attractive incentives for landlords and a reduction in property taxes could be a solution to Ireland’s housing crisis. However, he warned that it is a polarizing issue and that politicians would not want to promote the welfare of landlords when they are looking to be re-elected.
The lack of rental properties in the market is due to the fact that landlords are leaving the market in droves. Lynch believes that the market was flooded with landlords ten years ago as banks in Ireland encouraged young families to keep their smaller properties, rent them out, and leverage the new mortgage against the rental. The few landlords remaining are pushing to exit the rental market now that house prices are at record highs. “Property has never been at the value it is now, so it’s a good time to get out and get a good return on your investment,” Lynch said.
Rose added that landlords have to pay taxes on their rental income at 52%, which means they only get a fraction of what they are charging for a property. This situation is exacerbated by the fact that landlords may still be making mortgage repayments on the property. He also said that the legislation that governs the rental market is complicated and a nightmare for investors.
Rose and Lynch agree that promoting the welfare of landlords doesn’t serve politicians well when they are looking to be re-elected. Although everyone wants more rental properties on the market, they disagree on how to get them on the market, and the solution might be unpalatable to some.
SOURCE: Ref – By Rebekah Daunt
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