Brendan Burgess
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But if they weren't raising rents prior to the introduction of the controls, I doubt the imposition of restrictions and potential penalties would encourage them to start doing so.I would have thought landlords who were renting their properties at rents that were less than market rates would have been happy with the 4% RPZ limit.
I think I get what you mean, but if they weren't increasing the rents anyway and keeping them below market rates, then I'm not sure limiting the increase to 4% initially and then 2% makes any difference to them?But if they weren't raising rents prior to the introduction of the controls, I doubt the imposition of restrictions and potential penalties would encourage them to start doing so.
There was a two-year freeze on increasing rents immediately prior to the introduction of the RPZ regime. Market rents rose very substantially during that two-year period so a lot of landlords got stuck renting at 20-30% discounts to market levels.I would have thought landlords who were renting their properties at rents that were less than market rates would have been happy with the 4% RPZ limit
I have an excellent tenant, who repairs everything themselves and keeps the house in perfect condition. It's now 50% of the market rate. It's making very little profit but takes no effort on my part. If they leave I plan to sell. I would not pass this discount onto another tenant.I would have thought landlords who were renting their properties at rents that were less than market rates would have been happy with the 4% RPZ limit. Also, we know that a lot of landlords were leaving the market before the recent increase in inflation, so their costs hadn't gone up that much either
Market-wide RPZs should always have been a temporary measure, maximum three years.There was a two-year freeze on increasing rents immediately prior to the introduction of the RPZ regime.
It does if they were and are charging anything from 25-50% under the market rent. I know landlords who wouldn't charge market rent but would be happy to bring up rents at a more meaningful rate.I think I get what you mean, but if they weren't increasing the rents anyway and keeping them below market rates, then I'm not sure limiting the increase to 4% initially and then 2% makes any difference to them?
I must say that this is the one of the most intelligent, logical and sensible summaries that would go a long way to halting the slide of landlords exiting the marketplace and perhaps also attracting new landlords and investors into the sector.Market-wide RPZs should always have been a temporary measure, maximum three years.
After that some kind of pragmatic approach at property level should have been brought in. Rents in payment should not be allowed to remain untethered from market rents forever, but landlords should capped at closing more than a third of the gap a year, or 5%, whichever is higher. That would strike the right balance between consumer protection and respect of landlords' legitimate property rights.
The current situation where landlords are basically stuck below market rents in perpetuity is not just, and not very different from laws that were struck down by the Supreme Court in the early 1980s.
I agree with that, and I wouldn't blame a landlord being bitter about this. But would that cause the majority of them to leave the market? After all they were renting below the market rate at a rent they were happy with. Also, as rents have soared, the tenants they were happy with would be much less likely to leave.There was a two-year freeze on increasing rents immediately prior to the introduction of the RPZ regime. Market rents rose very substantially during that two-year period so a lot of landlords got stuck renting at 20-30% discounts to market levels.
If by referring to "the rapidly rising maintenance and other costs" you mean inflation, then this is only very recent and landlords were leaving before this.With rapidly rising maintenance and other costs and no ability to raise rents (beyond 2% pa), a lot of these rentals are no longer economically viable as a long-term investment.
I agree completely. I think rent controls have made the situation a lot worse and have been a factor in landlords leaving and as importantly preventing landlords entering the market. I am just questioning Mr Power suggesting "that the majority of landlords exiting the market are those who in the past charged rents that were less than market rates and are now only able to minimally increase rent on their properties because they are subject to RPZ rules".It is axiomatic that, over time, rent controls reduce the quantity and quality of available rental properties. It was entirely predicable that the RPZ regime would exacerbate our housing crisis.
Such landlords have zero incentive to upkeep their properties too, unless they do a massive job thereby allowing them to increase the rent.The current situation where landlords are basically stuck below market rents in perpetuity is not just, and not very different from laws that were struck down by the Supreme Court in the early 1980s.
I think landlords should be able to charge whatever the market can afford. I am just questioning that "the majority of landlords exiting the market are those who in the past charged rents that were less than market rates and are now only able to minimally increase rent on their properties because they are subject to RPZ rules".It does if they were and are charging anything from 25-50% under the market rent. I know landlords who wouldn't charge market rent but would be happy to bring up rents at a more meaningful rate.
The situation that pertained circa 2015 was bad for everyone because tenants and landlords alike had poor rights. Tenants could be turfed out too easily, too quickly, and were vulnerable to high rent increases. Landlords had poor rights as it was long and arduous to remove a difficult tenant.I must say that this is the one of the most intelligent, logical and sensible summaries that would go a long way to halting the slide of landlords exiting the marketplace and perhaps also attracting new landlords and investors into the sector.
Prior to the imposition of the limits they were free to reset rent when the tenants moved on as most do. It also may affect the value of the property, more so of course if the property is in a high-demand rental area.I think I get what you mean, but if they weren't increasing the rents anyway and keeping them below market rates, then I'm not sure limiting the increase to 4% initially and then 2% makes any difference to them?
I agree, but I suppose with the big jump in rent a lot of tenants would have stayed put (unless buying a house themselves etc)Prior to the imposition of the limits they were free to reset rent when the tenants moved on as most do.
I agreeIt also may affect the value of the property, more so of course if the property is in a high-demand rental area.
Yeah, I was thinking more of the typical pattern here where people starting out working rent for a few years prior to purchasing, but the numbers of those renting longer term does seem to be increasing.I agree, but I suppose with the big jump in rent a lot of tenants would have stayed put (unless buying a house themselves etc)
I think there was a kind of anti-abuse logic here to the prohibition on returning to market rents even when tenants had voluntarily left. The fear was that landlords would "trick" tenants on low rents into moving out, and then reset to a higher rent with a new tenant.Prior to the imposition of the limits they were free to reset rent when the tenants moved on as most do.
Yip, and prevent new landlords entering the market.To me it's a complete duplication now that grounds for termination by landlord have been so restricted anyway, and are reasonably well enforced by the RTB.
As we all know the main impact is to make landlords leave the market.
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