Tyrrelstown debacle.... Impact on landlords?

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aido71

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Been following the Tyrrelstown debacle with interest and a lot of emotive debate with calls for legislstative changes to " protect" tenants. Am just wondering given the whole housing issue in general and the current political uncertainty are we potentially facing scenarios whereby tenants get afforded even more rights that will make it virtually impossible for a private landlord to sell a property? It's tough enough being a landlord and it fills me with dread that in the future I could be even more restricted with what I can do with my own property. I would surmise that if changes were mooted that it would cause an exodus of landlords from the private rental market thus causing even more difficulty in the housing sector. I am fortunate in that I am not in negative equity so I could get out reasonably quickly and not be left with massive debt but I would be concerned for the large number of reluctant landlords who are in massive negative equity already. Just wondering am I the only one a bit uneasy about the current scenario? I know they talking about vulture funds but we could all get caught in whatever mad scheme the left wing politicians (am being polite here) try to ram through...!!!
 
The tenants aren't being thrown out on the streets... my initial understanding (open to correction) is that leases are not being renewed over the course of the year. I'm not sure what further protections could be afforded even if I were a so-inclined left wing politician?
 
The problem with Tyrrelstown is the sheer scale of it. Over 60 families have been given notice. This is a black swan event. There should be no need to change legislation for something that is unlikely to happen again.


Steven
www.bluewaterfp.ie
 
It's a perfect storm and almost inevitable when you consider the combination of the outsourcing of social housing by councils, negative spare capacity in the rental sector, and the level of concentration of tenants in a single indebted estate we see here. It's the three together acting in concert.
 
odyssey06 said:
It's a perfect storm and almost inevitable when you consider the combination of the outsourcing of social housing by councils, negative spare capacity in the rental sector, and the level of concentration of tenants in a single indebted estate we see here. It's the three together acting in concert.
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And that's my concern with the current race to the bottom to cobble together a government. I don't trust that unecessary legislation be rushed through as a populous move. Housing is one of the biggest issues facing the next government and whilst this may be unique in scale it could result in all private landlords being caught in its wake. Hopefully I am wrong big time but the left aren't going to let go of this easily. No quick fix for housing crisis and could be a new government will grab any straw they can
 
I don't know enough about the Tyrellstown issue, but from a high level reading i'm not certain that the houses will actually be sold that they may well end up back on the rental market at a significant increase in price and that we may see more of this due to the law introduced reducing the rental increase to once every 2 years. Is there anything in law that can stop these properties from being offered for rent once the tenants have been kicked out/had their leases end?
 
There are reports of a similar situation in Cork with 35 tenants told in Jan they had to leave their appartments by March 18th. Whilst in some cases, the tenants may be able to buy the house or apartment, I fully expect that the bulk will be sold to cash buyers who will put the property up for rent again at a significantly higher rent. That to me is the only reason the tenants are being evicted/lease let run out or whatever language you want to put around it.

Maybe it is time at long last to consider the German model of unlimited contracts or something similar. They don't seem to be doing too bad over there as a nation
 
dereko1969 said:
I don't know enough about the Tyrellstown issue, but from a high level reading i'm not certain that the houses will actually be sold that they may well end up back on the rental market at a significant increase
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On the basis of the facts as presented by Twinlite c40 tenants have been informed that their tenancies will not be renewed upon expiry of the lease. Twinlite built the complex and have stated that at no stage did they intend getting into the long term lease market. The drop in property prices and demand forced them to lease rather than sell the remaining properties in the development. This decision had nothing to do with Goldman Sachs or any vulture fund and was always going to take place when property prices reached an acceptable level. This is being played up in the press as a natural consequence of loans being taken over by "vulture funds" which it clearly is not. The bank in question (Ulster Bank) were never forcing a sale of the properties and the decision is purely a commercial one.
Obviously it is unfortunate for the families that will not have their lease renewed but realistically there is no legislation that could have avoided this issue other than a Government direct purchase of these properties.
The German model of rental properties is often touted as being something that it is not as the German housing market is totally different than the Irish one. Introducing further legislation to restrict the rights of landlords is just going to drive more landlords out of the market (see earlier post) and while some tenants will enjoy better protection the availability of rental units will decrease.
The difficult with simplistic solutions is that while they appear to solve a problem the unintended consequence is that they frequently create other problems and ultimately result in causing more harm than good. Interference in the marketplace always has a cost.
 
I'm curious why people seem to think that an implementation of a German model will drive landlords out of the marketplace. Why given it doesn't happen in most other countries? Even if some landlords upped and sold, so what. There will still be a demand for rental properties and where there is a demand and a means of supply, market forces will reengage

Reality is that for many people, the current market solution simply is not working so why not blow it up and start again.
 
44brendan said:
On the basis of the facts as presented by Twinlite c40 tenants have been informed that their tenancies will not be renewed upon expiry of the lease. Twinlite built the complex and have stated that at no stage did they intend getting into the long term lease market. The drop in property prices and demand forced them to lease rather than sell the remaining properties in the development. This decision had nothing to do with Goldman Sachs or any vulture fund and was always going to take place when property prices reached an acceptable level. This is being played up in the press as a natural consequence of loans being taken over by "vulture funds" which it clearly is not. The bank in question (Ulster Bank) were never forcing a sale of the properties and the decision is purely a commercial one.
Obviously it is unfortunate for the families that will not have their lease renewed but realistically there is no legislation that could have avoided this issue other than a Government direct purchase of these properties.
The German model of rental properties is often touted as being something that it is not as the German housing market is totally different than the Irish one. Introducing further legislation to restrict the rights of landlords is just going to drive more landlords out of the market (see earlier post) and while some tenants will enjoy better protection the availability of rental units will decrease.
The difficult with simplistic solutions is that while they appear to solve a problem the unintended consequence is that they frequently create other problems and ultimately result in causing more harm than good. Interference in the marketplace always has a cost.
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Thanks for that, that explains it all.
 
thedaddyman said:
I'm curious why people seem to think that an implementation of a German model will drive landlords out of the marketplace. Why given it doesn't happen in most other countries? Even if some landlords upped and sold, so what. There will still be a demand for rental properties and where there is a demand and a means of supply, market forces will reengage

Reality is that for many people, the current market solution simply is not working so why not blow it up and start again.
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Good blog on the German housing model below.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

There are loads of reasons coming out of that why it wouldn't work in Ireland...or it would take a long time to implement. Successive governments encouraging home ownership being at the top.


Steven
www.bluewaterfp.ie
 
thedaddyman said:
I'm curious why people seem to think that an implementation of a German model will drive landlords out of the marketplace. Why given it doesn't happen in most other countries? Even if some landlords upped and sold, so what. There will still be a demand for rental properties and where there is a demand and a means of supply, market forces will reengage

Reality is that for many people, the current market solution simply is not working so why not blow it up and start again.
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Reason is that for most of us landlords the market is over regulated in favour of tenants. The interest relief is not 100%, there is now USC and PRSI on income regardless whether a profit is made. Throw in LPT and water charges (for tenant to pickup) then the reasons for me getting in the market 13 years ago are no longer there. I will bide my time and sell up to move to warmer climes!
 
SBarrett said:
Good blog on the German housing model below.

http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/

There are loads of reasons coming out of that why it wouldn't work in Ireland...or it would take a long time to implement. Successive governments encouraging home ownership being at the top.


Steven
www.bluewaterfp.ie
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There isn't a single reason in the article as to why it wouldn't or couldn't work in the long term in Ireland. I have no argument that it would be a long term project but that in itself is not a reason to start. Would it really be such a bad thing if we moved from the boom to bust model we currently have and amateur landlords were forced out of the game? There are enough posts on here with people in difficulty over buy to lets because they didn't have a clue what they were doing in the first place and thought it was an easy way to make money rather then treating it as a business.
 
thedaddyman said:
There isn't a single reason in the article as to why it wouldn't or couldn't work in the long term in Ireland. I have no argument that it would be a long term project but that in itself is not a reason to start. Would it really be such a bad thing if we moved from the boom to bust model we currently have and amateur landlords were forced out of the game? There are enough posts on here with people in difficulty over buy to lets because they didn't have a clue what they were doing in the first place and thought it was an easy way to make money rather then treating it as a business.
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That article doesn't argue about having the German property model, it merely explains it.

It would be a very long term model and something that I couldn't see any Irish government taking on as they only think in 5 year cycles.

It would take a massive shift in the way we think about home ownership for a start. There is an obsession with property and property ownership in this country. That won't be that easy to change.

Then there will have to be a change in the way that we build property. Of all the tens of thousands of apartments that were built in this country, none of them are suitable to live in throughout a lifetime. They are small and poking with little amenities, very unsuitable for the family rearing stages of people's lives. Even modern built houses are gone to 3 floors, with the kitchen on the bottom, sitting room in the middle and bedrooms up top, with tiny gardens. No where for kids to kick a ball. Will the government intervene and force them to create more green space? They can't get them to build at the moment when there's a huge demand for housing.

I don't think the difficulty people have with BTL's on here has anything to do with what you were suggesting. That was down to banks throwing money at people, so that they didn't actually need to have any money to buy multiple investment properties, they just released equity on their homes. The current model of needing a 30% deposit has put an end to that form of gambling.


Steven
www.bluewaterfp.ie
 
On Landlords:
- far more favourable treatment for REITs (and vulture funds) than individuals (eg USC and PRSI)
- PRTB do a reasonable job
- Many good landlords but some dreadful ones
- it is one of the few asset classes available to individuals

On Germany:
- happen to have 480 houses per 1000 of population i.e. happens to be a lot of housing units
- UK 440 - see what happens when there is a protracted shortage
- Ireland - worse at 430
- Deductability of interest for BTL
- why would you ever own (and occupy) your own house in Germany?
- simplistic to believe that Germans do not like property
- house price inflation low so there is little by way of speculative investments

For Ireland:
- The American investors salute your assistance in structuring fail safe investments
- Michael Flynn suggested you need developers (true) but the key is the costs and the share out
- A properly controlled housing association focussing on costs and quality
- the absurd planning process
- needed in Dublin mostly and needs to go up (can have best facilities e.g. Herbert Park apartments used to be most dense)
- somebody with a track record of rent needs to be incorporated into CBI limits
 
SF TD Peadar Tobin on rte radio 1 now believes that at least 12 months notice to end a tenancy should be the law in situations such as that at Tyrellstown
 
Delboy said:
SF TD Peadar Tobin on rte radio 1 now believes that at least 12 months notice to end a tenancy should be the law in situations such as that at Tyrellstown
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Someone should let the PRTB they have to do things in 12 month. They'll be horrified.
 
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