Changes to rent controls announced - discussion

Protocol said:
Given that our rents are amonmg the highest in the world, then surely there should be a queue of landlords willing to rent?
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Your forgetting the math of it all.....the rent is the numerator, sure it's high by international standards.....but your forgetting the denominator (build cost) which is just so much higher for apartments than you can imagine....combined you get the the gross yield.....and its pretty low.

The math on building an apartment block in Dublin is outrageous.....due to dual aspect etc etc......the gross yield is just not as high as you would think (given the cost to build). Then a PRS provider needs to factor in the RPZ stuff....you've got serious sovereign risk in Ireland that RPZ v.4.0 to come when Sinn Fein get into power could just wipe out the already poor math I outlined above. These are folks with options....they can go to Birmingham to build an apartment block they dont have to do anything in Dublin....what woud you do....you wouldn't take the risk, you'd go somewhere that has no RPZ nonsense at all.
 
Protocol said:
I don't understand why landlords have or are focussing on the 2% per annum change in rents, versus focussing on the level of rents.
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It’s a fair point but a few factors to note but compared to other major cities:
1) income tax treatment of rents very high
2 little can be written off against tax
3) CGT is high
4) capital is expensive - BTL rates are very high and limited lending
5) construction costs high
6) planning process slow and uncertain
7) limited upside due to rental caps but unlimited downside

All of this raises the hurdle rate a project has to get over to be profitable.
 
I have posted before regarding these comments, but I feel I should do it again.
I keep track of the number of rental properties in Swords county Dublin and a few years ago they were between 200 and 300 properties available. As of this morning there were only 4 properties available in the whole of swords.
A sample or 4 rental properties in Swords, out of thousands being rented, being used to determine rental inflation seems absurd to me. These four properties could easily be landlords renting for the first time or potentially landlords just ignoring the rent pressure zone rules for reletting. Meanwhile 99% of the other rental properties in Swords are stuck at potentially way below market rents with the rent pressure zone rules. As a large Landlord I am in this boat.
I’m sure almost every other landlord reading these comments about high rents is thinking the same thing!!!

So it is extremely frustrating when it is expected that landlords should accept this new legislation (and not sell up) “because their rental income is so high”
 
If you bought the property a while ago, yes, you have enjoyed substantial capital appreciation. But in order to realise that you have to sell the property which, in the current market, requires that it be vacant which, under these rules, will be difficult to acheive.

If you're investing in a property today, you'd be mad to expect the same rate of capital appreciation. The rates of appreciation that we have seen up to now are directly responsible for the current housing crisis; they cannot be sustained into the future. So if you are investing in lettable property now, you're looking to the rental stream as the major component of your return on investment.
 
landlord said:
A sample or 4 rental properties in Swords, out of thousands being rented, being used to determine rental inflation seems absurd to me.
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It would be but maybe naievly I assume that average rents are calculated by PRTB and not Daft, although the Daft report is what gives the headlines? Though from what I hear about their IT systems I shudder to imagine how. But it must be broadly correct.
 
100% correct. Because of the inability to get vacant possession, the minute you hand over the keys to a tenant, the value of your property has probably halved. It will only go back to market value when the tenant leaves.

Banks won't lend to BTL investors either - they will be taking the same risk. If they have to repossess, they will be selling with a sitting tenant.
 
Hi, I´m a small landlord with 2 properties. One of which became empty last year when the tenants moved out, but I haven´t rented it out again as I was only getting €700 per month. The house had been rented out to the same family for more than 15 years and I firstly didn´t increase the rent and then with the introduction of the RPZ in Kilkenny I couldn´t increase the rent by very much.

If I rent this house out again after the 31st of March next year can I set a new rent in line with the average or can I only increase it by 2%?

Also, if my second property happened to become vacant next year would I be able to increase the rent on that house, or would I have to give the new tenants a six year contract and wait till the end of the six years to increase the rent?
 
Paul22 said:
Also, if my second property happened to become vacant next year would I be able to increase the rent on that house, or would I have to give the new tenants a six year contract and wait till the end of the six years to increase the rent?
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The rules seem to be as follows:

1. If you enter into a new lease with new tenants post March 2026 you will be renting at market rent.
2. You will be granting your tenants a fixed 6 year lease. You will not be able to sell the property until the end of the 6 year period and to do that you will have to issue an eviction notice
3. For the six years the rent increases by 2% or inflation if less per year.
4. At the end of the 6 years you can reset to market value if your tenants are still there
5. If your tenants leave of their own accord during the 6 years, you can re-let at market value to new tenants.

Keep in mind, however:

1. I think that there is a real risk that you will not get an increase at year 6 and/or that between tenancy increases may be restricted. An SF government would bring in a rent freeze. FF FG may cave into pressure and do so as well.
2. Will your tenants be able to pay the increase at year 6? Even if they have good salaries, a 20% increase will be a big cost which they will fight.
3. If your tenant is difficult, you cannot simply sell up. You could try to evict but the RTB will be on their side.
4. If you need to sell at say year 4, you won't be able to do so unless you can prove you are suffering severe financial problems or are at a risk of homelessness.
5. Expect higher standards and increased inspections. They went easy on these before because a landlord facing a big bill would sell.

Personally I think landlords are taking onboard a lot of extra risks for the right to reset to market value.

As you have a free property now and can still evict to sell in the other one, I would think long and hard about about re-letting after March
 

Getting your property back into your hands unencumbered by tenants I think is slightly more doable for a small landlord....not a huge leap from taking possession of the property for an immediate family member and discovering a month or so later that you need to sell up.

With the important caveat that @Greenbook mentioned.....this government could fall at any moment....and SF/PBP would land in with emergency measures etc. etc.

The regulatory risk to holding property investments in Ireland has IMO gone through the roof.......landlords could and should be prepared to check their properties into the Hotel California....

. "You can check in anytime you like, but you can never leave."

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Might start researching Newry, risk of fx etc. Have 2 properties set to Ukrainians but ends next year and will likely sell both,

Being an Irish Landlord is like dealing with a permadrunk caligula. I cannot deal with this anymore knowing an opposition govt will make this lot look sane and reasonable.
 
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letitroll said:
not a huge leap from taking possession of the property for an immediate family member and discovering a month or so later that you need to sell up.
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I'd agree. It is easier for a small landlord. However, this can only happen at year 6 and you can bet that they will make the process fiendishly difficult and very easy to get wrong. If you if make any slip up, you could be waiting another 6 years. Between year 1 and year 6, you have to prove severe financial hardship or risk of homelessness

letitroll said:
"You can check in anytime you like, but you can never leave."
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That is correct. If you are a large 'landlord' especially you may find that you are one forever.
 
Greenbook said:
However, this can only happen at year 6
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Really I thought the anytime possession of a rental property for an immediate family member remained for small landlords......what changed was the tightening up of what constitutes "family"....perhaps I'm wrong
 
letitroll said:
Really I thought the anytime possession of a rental property for an immediate family member remained for small landlords......what changed was the tightening up of what constitutes "family"....perhaps I'm wrong
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When I look at the press release now, you are correct. That right remains during the 6 year period for small landlords. However, if you sold shortly afterwards and it was spotted, I think you'd be in trouble.
 
Are Landlords with 4 or more properties considered large Landlords from now or not until March 2026
 
With all what looks like extra restrictions on small landlords why are the government so against giving a few more tax breaks to them . Surely wouldn’t hurt the exchequer that much compared to some of the other stuff they doing . If housing is the big issue doing a bit in this area might make it more appealing to be a landlord
 
Metafora said:
Surely wouldn’t hurt the exchequer that much compared to some of the other stuff they doing
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Yep - given they chickened out on this measure (the tough one politically for them if I'm being kind).....my guess is there's a few tax & grant sweeteners coming.....it cant be lost on them that the reaction to this 'reform' has been poor from both small and large landlords......FF/FG will do what they do best.....throw our money back at us and ask us to say thanks.....
 
Metafora said:
With all what looks like extra restrictions on small landlords why are the government so against giving a few more tax breaks to them . Surely wouldn’t hurt the exchequer that much compared to some of the other stuff they doing
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They'll die on the lowry hill, defend him to political death, bring the Dail to a standstill but are super sensitive to angering the left wing with any suggestion of tax breaks...they're left wing themselves now in all but name.
We sorely need a right of centre political party with some backbone
 
I wouldn't bet on tax breaks. It would be very difficult politically to make a case for them.

Builders of post March 2026 BTR may get them to encourage supply, but that will be it.

I think too many older landlords want a return to the glory days of S.23. It is not going to happen.

If you're planning on staying as a landlord, don't factor in possible tax breaks. Do so on the merits or otherwise of the new system.
 
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Could posters who understand the committee amendments stages of bills explain please? Do amendments at this stage get included in the final Act?

These are from the 18th and 19th and have sections about an emergency ban on all rental increases, changed dates from Feb 2026 to June 2028, and no terminations.

 
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