I watched Sinn Féin accusing the government of taking the side of the institutional landlords against the tenants.
As far as I can see, the institutional landlords are still investing in the Irish market. It's the small landlords who are leaving.
So how about telling [small] landlords that rent restrictions will be eased over the next three years?
After two years, they can charge the full market rent.
In six months, they can increase the rent half way between the current rent and the market rent.
Existing landlords who enjoy the business, might be tempted to stay.
New small landlords might enter the market if they knew that they could manage their investment like an investment.
It would stop penalising good landlords who did not maximise their rent.
At the moment any property which is rented below the market value will not be bought by a potential landlord because of the restrictions. But if this restriction was eased, potential landlords may well buy existing investment properties.
There would have to be some anti-avoidance measures so that investors with 6 properties wouldn't sell off three of them to get down to the 3 property limit.
Brendan
Brendan,
Having strived to be a "good" small LL for more than 25 years, we prided ourselves differentiating our BTL product offering through a combination of high quality location, fixtures, fittings, safety, condition, service and value for money. Something not right, or broken, always fixed immediately. A problem related to the property experienced by the tenant, was automatically our problem and priority. This is the type of service we wanted to receive, therefore we provided that same level of service offering to our customers. There are plenty, yes, plenty, of small LLs offering similar levels of product and service around. We are not unique in this regard.
As outlined on an AAM thread previously, due to the volume and type of changes in regulation and growing number of responsibilities being pushed onto LLs, coupled with the loss of control over the investment asset in terms of when and how to sell it, we are currently selling our five BTL’s in Ireland, with three recently sold and two due to go later this year. For us, as “small” LLs this was a significantly sized portfolio in terms of investment. However, caught in RPZ purgatory, these BTLs were all severely underperforming. While we cannot predict the future with any certainty, we can evaluate the recent past and point to the volatility of government policy to determine the likelihood of future market conditions and increasing regulation. Our personal assessment is that the BTL market is now dysfunctional with an unacceptable degree of risk facing small LLs in setting out their eventual BTL exit strategy.
To address your question as an experienced “small” BTL investor, consequent to government performance since the introduction of RPZs in 2016, it no longer matters one jot what leaks or kite flying the current government now undertakes to persuade me to remain in the Irish BTL market. Government policy and resulting volatility has damaged BTL market confidence to the extent that, in my view, it will be a very long road travelled before the government can regain investor trust and confidence to a level where any sane investor will undertake a 20 year repayment obligation on an asset to which control by the owner may be significantly reduced during that time. The ever changing policy landscape has caused long term damage to this segment of the market. Recovery will not be quick. The blame for this lies solely with government, no one else. Small BTL investors currently still in the market should be listening very carefully to the wider mood music. Should they choose to remain in the market, they are either foolish or extremely brave.
LL's have outlined what they require in order to stay in this business segment in Ireland. Government has had opportunity to consider this well publicised and discussed feedback. The government (and revenue) decided against delivering the meaningful change required to enable LLs to continue to operate or to further invest in the market. Its quite simple, small investors will keep investing, but just not in BTLs in the Irish market.
www.cso.ie
