Changes to rent controls announced - thread for clarifying

[infinity]

Just want to see if I am correct in my thinking. I am a single property landlord. Have had same family in house for about 14 years - they are leaving the house in the next month or two.
Have kept rent low and have fallen considerably behind "market rent" (probably 50-75% behind what other similar houses in the area are getting).
Having done some rough calculations - it would seem that it would be much better for me to keep the house unoccupied until Mar 2026, when I can legitimately increase the rent to market rent.
If I let the house now - then I am stuck with the 2% RPZ increases for 6 years?

 

[DannyBoyD]

better for me to keep the house unoccupied until Mar 2026

That would be my understanding at this time.

We can't be certain until we get all the info; but if you have the option to leave it vacant, thats what I would do.

You'll need to refurb anyway; so you can take your time.

 

[Greenbook]

Infinity - the rules post March, while they do allow increases to market rates, are much more rigid and are subject to rent control. You'll be locked in to a six year tenancy with very limited rights to evict and the current rent caps until year 6. At year 6, you will be entitled to increase the rent to the market rent, but large increases in 2032 will, I think anyway, be stalled by the political system.

Now that your place is vacant, you should consider all your options like selling, renting to short term tenants only, renting to a family member etc.

 

[DannyBoyD]

You'll be locked in to a six year tenancy

as of now tenancies are unlimited

with very limited rights to evict

Same as currently - post 03/26 can still look to sell or for own / family use after 6 years.

and the current rent caps until year 6

As of now max increase 2%. No ability to get to market rent, unless property untenanted for 2 years.

Post 03/26 can set to market rent if tenant vacates voluntarily.

The major change in my view is that the entire country is an RPZ.

 

[Greenbook]

as of now tenancies are unlimited

Yes, but you can evict to sell or move family it at any time

Same as currently - post 03/26 can still look to sell or for own / family use after 6 years.

Yes, correct, but you have one shot at evicting to sell every 6 years. If you mess up the paperwork (and I suspect that they'll make it complicated), you'll be locked in for another 6 years. If you are a large landlord (above 3 properties), you can never evict except for breach of tenancy terms

Post 03/26 can set to market rent if tenant vacates voluntarily.

Correct, but landlords have been able to do that since time immemorial - you could do that also outside rent pressure zones

My view is that the new rules are of little real attraction to landlords. Sure, we've gotten back the right to reset the rent when a tenant leaves themselves, but in return for that we have permanent very strict rent control (personally, I've little faith in getting a high increase at year 6) and a much restricted right to vacant possession if you are a small landlord and its entire loss if you are a large one.

My view is that unless you can ensure that you have a continuous flow of short term tenants, the risks of being a landlord - a permanent or semi permanent tenant at lowish rent with you responsible for all repairs, maintenance and improvements - are too high to make this a worthwhile investment anymore.

Certainly, if I was somebody who had €300k in the bank, which is on average about the minimum you need these days to buy something decent - I would not be putting it into residential property.

 

[DannyBoyD]

landlords have been able to do that since time immemorial

Not in RPZs

 

[Greenbook]

Not in RPZs

Yes, but for the many decades before RPZs they could. They could also do so elsewhere in the world as well. Our rent cap system, where the rent is tied to the property was unusual apparently TCD paper (page 2).

Anyway, we'll have to agree to differ. My view is that in return for getting back something we always had, we've now got a much restricted or no right to vacant possession with the risk of having to find another cash landlord to buy at a discount plus permanent and country wide rent control. The RPZs were introduced due to 20% annual increases in central Dublin and Cork City. I can't see any government allowing significant rent increases from 2032 onwards. Between tenancy rent increases may end up recontrolled in some manner again. Governments have the tendency to keep the bits they like - limited right to vacant possession and rent control - and 'ban' what they don't like - market rate rents

 

[bipped]

Another question.
This part is clear enough. A new tenancy that starts after Mar26 will be for a six year period with rents capped at 2%. No changes if the tenancy rolls on for the next six years, except the 2% annual increase. When the tenant voluntarily vacates at the end of the six year cycle, a new tenancy rent can be re-set to whatever the market rates are at that time.

I’m not clear about what happens if the tenant voluntarily vacates say after 2 or 3 years as that would be midway through the six year cycle. When a new tenancy starts, could the new rent be set at market rates at that stage?
In other words, can the rent be reset to market rates at the start of every new tenancy no matter how long the previous tenancy lasted?

 

[Sarenco]

I’m fairly sure the rent can be reset to market every time a tenant leaves voluntarily post March 2026.

But, again, we would need to see the legislation to be sure.

 

[knightrider]

Is it still the understanding that if a tenant voluntarily leaves a property before 1 March 26 and the rent is below market, that a new tenancy post 1 March 26 can be set to market or does the LL need to wait another 6 years? This is a small landlord.

 

[Greenbook]

Is it still the understanding that if a tenant voluntarily leaves a property before 1 March 26 and the rent is below market, that a new tenancy post 1 March 26 can be set to market or does the LL need to wait another 6 years? This is a small landlord.

It seems to be that you can re-let at market rent once the new tenancy is post 1 March 26. At least that is what the politicians said when the new rules were announced, but we can't be fully sure til the legislation is enacted

 

[knightrider]

Thanks a lot. In my situation, my tenant has given notice (got a council house) and leaves end Sep. The rent is around 1400 and market is around 2000. If i can readjust on 1 March it makes financial sense to leave empty until then. Shame to have to do this but if i relet now i'm stuck on well below rent with the 2% for the foreseeable future. Do we know when the legislation is enacted?

 

[Greenbook]

Do we know when the legislation is enacted?

We don't, there is no detail on that. It seems it'll be published in November. That's all we know at this stage.

Do look at this in the round though. Your March 2026 tenancy will be a 6 year one. What if your personal circumstances change and you need to sell - you won't be able to except with the tenant in situ which means you won't get the full price. Also, will you be happy with the new rent for 6 years (increases will be tiny in the meantime) and the possibility of a rent freeze or similar in 2032 if big increases are due. The ability to rent at the market rate is welcome, but is only one part of the picture. The rules are much more restrictive.

 

[Villaines]

Anyone having a a low rent property should probably consider waiting until the 01.03.2026 to rent again if the renters were leaving.

Imagine a former rented property that was vacated in Jan 2025 in order for use by a close family member. All validly exercised and legitimately terminated, all above board.

So the family member occupies for 12 months minimum. Then come Feb 2026, family member decides they no longer need the property.

Presuambly under existing rules, if re-let in Feb 2026 rent is capped at historic rent plus uplift since date rent last set.

But does the new legislation allow a reset of rent to market level post March 2026, even though previous tenants only left in Jan 2025 (less than two years previously), and only left because of a need by a landlord's family member

The hope was that the family member would stay there for at least 24 months, but this may not work out.

 

[Greenbook]

But does the new legislation allow a reset of rent to market level post March 2026, even though previous tenants only left in Jan 2025 (less than two years previously), and only left because of a need by a landlord's family member

It has been mentioned that if you have a no-fault eviction to sell (and change your mind) or to move a family member in, and, again, that doesn't work out for whatever reason, you can only ever rent that property again at its original rent plus 2%. It has definitely been mentioned as one of the new rules, but whether it will only apply where these types of evictions occur after March 2026, I don't know. Again, we await the legislation, apparently due in November.

 

[Setforlife]

Do look at this in the round though. Your March 2026 tenancy will be a 6 year one. What if your personal circumstances change and you need to sell - you won't be able to except with the tenant in situ which means you won't get the full price. Also, will you be happy with the new rent for 6 years (increases will be tiny in the meantime) and the possibility of a rent freeze or similar in 2032 if big increases are due. The ability to rent at the market rate is welcome, but is only one part of the picture. The rules are much more restrictive.

That’s our thinking too, we plan to sell in 2028, current tenants in situ for 10 years or so, if they were to leave pre 2028 we would have to just leave it empty until can sell no matter what rent we could charge or how difficult it would be to fund. Got the view of an estate agent who estimated 20-30% price reduction with tenant in situ as large landlords won’t bid much against each other and the know market for tenant in situ homes post 2026 will be extremely limited. Suggested moving back in and renting a room under rent a room scheme as an option, which would also actually be significantly more profitable than being a landlord.

 

[Greenbook]

Got the view of an estate agent who estimated 20-30% price reduction with tenant in situ

That reduction sounds correct. The market will be limited to landlords who are cash buyers as buy to let lending is tiny, literally a handfull of approvals every month. So aside from the price reduction, you might be waiting quite a while to sell. You might also only get one interested landlord who will soon spot that he can name his price.

 

[Setforlife]

That reduction sounds correct. The market will be limited to landlords who are cash buyers as buy to let lending is tiny, literally a handfull of approvals every month. So aside from the price reduction, you might be waiting quite a while to sell. You might also only get one interested landlord who will soon spot that he can name his price.

The agent felt it could even be more of a price penalty but that the assumption would be no one would sell at a further price reduction than that.

 

[Greenbook]

The agent felt it could even be more of a price penalty but that the assumption would be no one would sell at a further price reduction than that.

Mightn't have much choice as your only other option is to continue renting and, as you're looking to sell, you presumably don't want to do that.

 

[lff12]

So landlords who want to get out of the business will have to sell to other landlords?

Quite a lot are already doing so, most pre63s are now listed in B2B sales rather than on open market.

Will an owner of 1 house with 5 flats now be considered a large investor and if so they will have to keep each flat vacant as tenants leave in order to eventually sell the house which could mean vacant flats for many years.

Yes, although currently it is I think either 10 or 12, and since every flat in a pre63 counts as a unit, technically someone with just 1 jumbo sized pre63 is already classified as a "corporate landlord." (Now that said there are quite a few professional landlord invest in little other than large pre63s).

I actually think the biggest losers will be low income tenants who need long term tenancies (can't afford to buy and too much income for social housing). No landlord, especially a large one will rent to one. Think about it from the large landlord's perspective

This is already the case. That's why we have HAP.

I suspect that the answer will be that if you leave the tenant in place, it continues at the current rent. If you evict, your new tenant comes in at current rent. I simply think this is the case because they will be as pro-tenant as possible. They have already said that if you evict for family purposes and re-let later on, the old rent is carried forward so the same logic will apply here.

That is to remove an incentive to evict in order to place back on the PRS within a short time to increase the rent above allowance rates.

Infinity - the rules post March, while they do allow increases to market rates, are much more rigid and are subject to rent control. You'll be locked in to a six year tenancy with very limited rights to evict and the current rent caps until year 6. At year 6, you will be entitled to increase the rent to the market rent, but large increases in 2032 will, I think anyway, be stalled by the political system.

Likely to be the case, yes. The trouble is, with the experience a lot of tenants have now, or their friends, or people who would like to be tenants, there will be pitchforks out for landlords by 2032. Choice really is, do you want to stick with this system, or not? Its only going to become more heavily regulated as political pressure continues to pile up. That's the hard choice really.