Reports: Government will retain rent controls for existing landlords but lift them for new investors

RTE reported on the news that existing tenants will be subject to the 2% limit for 6 years, after which market rents apply.

That would be a big improvement.

It would be worth investing in apartments with an existing tenant on a very low rent, if you knew that you could get a market rent in 6 years.
 
Bronte said:
The continental model.
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I think a lot of small Irish landlords would be happy to rent a place for a fixed term of, say, 10 years at market value plus agreed small annual increases where the tenant furnishes and is responsible for repairs and maintenance. Also, as you say, onerous tenancy obligations which are enforced. And, indeed, landlord ones which are enforced too.
 
Brendan Burgess said:
It would be worth investing in apartments with an existing tenant on a very low rent, if you knew that you could get a market rent in 6 years.
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Based on what has happened to date, I would think that would be a risky investment. I wouldn't like to bet on what the rules will be in 6 years time. We could have a Sein Fein government or simply a new FF Housing Minister with a completely different view (Browne seems to be very set on reversing some of O'Brien's interventions)
 
The last 6/8 years have been so chaotic that it's difficult to trust that changes will not happen again. There were 6 years tenancies, unlimited tenancies, 4 per cent yearly increase, 2 per cent yearly increases, changes in notice periods , changes in the way notice can be handed, rent freezes and eviction bans... Not sure how the government can encourage any confidence on the new system.
 
Premos said:
The last 6/8 years have been so chaotic that it's difficult to trust that changes will not happen again. There were 6 years tenancies, unlimited tenancies, 4 per cent yearly increase, 2 per cent yearly increases, changes in notice periods , changes in the way notice can be handed, rent freezes and eviction bans... Not sure how the government can encourage any confidence on the new system.
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I couldn't agree more. The new rules will be meddled with as well.
 
Brendan Burgess said:
RTE reported on the news that existing tenants will be subject to the 2% limit for 6 years, after which market rents apply.

That would be a big improvement.

It would be worth investing in apartments with an existing tenant on a very low rent, if you knew that you could get a market rent in 6 years.
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Six years starting when - from the date of the cabinet approval or the internal tenancy clock i wonder?
 
Of course the other thing with this market rent reset mechanism into a deeply constrained market is just a huge incentive from a landlord perspective to set the new six year rent at the most aggressive level they think might be possible.....knowing your stuck with it at + 2% p/a for six years......your going to get landlords sitting tight holding out for somebody in a pickle to consummate a new tenancy and so your going to get some outrageously high rent price inflation down the road that's for sure.....and now it becomes clear why six years was chosen.... out past the 2029 election.....and into the early to middle portion of the next Government's tenure!
 
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letitroll said:
Of course the other thing with this market rent reset mechanism into a deeply constrained market is just a huge incentive from a landlord perspective to set the new six year rent at the most aggressive level they think might be possible.....knowing your stuck with it at + 2p/a for six years......your going to get landlords sitting tight holding out for somebody in a pickle to consummate a new tenancy and so your going to get some outrageously high rent price inflation down the road that's for sure.....and now it becomes clear why six years was chosen.... out past the 2029 election.....and into the early to middle portion of the next Government's tenure!
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I think it will be more of an incentive not to let to anyone who is likely to be a long term tenant as it seems you can reset to market rent if a tenant leaves before the end of the 6 year period. Why would you rent to somebody who was likely to stay the 6 years when you can't sell durng that period and increases are capped. Much better to rent to some tech type who'll be off within 18 months; you have control of the property again and can re-let at market rent if that is what you decide to do.

If my understanding of how this will work is correct, one thing it will certainly do is incentivise letting to short term tenants. A long term tenant is a positive disadvantage.
 
Greenbook said:
Why would you rent to somebody who was likely to stay the 6 years when you can't sell durng that period and increases are capped.
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Yep good point - if your a foreign born Google/Meta/TikTok employee renting an apartment in D2 you just became a preferred tenant to a landlord.....if your a native Dublin metro prospective renter you might not be getting an email back from any of your Daft.ie inquiries moving forward.....you instantly just became a terrible strategic business decision for a landlord.

Some folks like to call this stuff unintended consequences.....that would be true if the literature on rent controls and the distortions they create wasn't so overwhelming.

If you had a time machine you'd first go back and stop baby Hitler.....next thing you might do is go back and stop the introduction of RPZ in 2016. It's been in aggregate a disastrous policy (the only winner is an RPZ tenant who's been in situ since 2016....a very small number).....all entirely predictable from a 100yrs of economic case studies on rent controls and the damage they do.

"Oh what a web we weave when first we try to deceive.....housing shortages"
 
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Greenbook said:
I think it will be more of an incentive not to let to anyone who is likely to be a long term tenant as it seems you can reset to market rent if a tenant leaves before the end of the 6 year period.
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My thought too. As the situation has been shifting and changing regularly, that is already the approach we have been taking.
letitroll said:
the only winner is an RPZ tenant who's been in situ since 2016....a very small number
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You don't to need to be a tenant since 2016. Just need to be in rpz in a property rented since then.
 
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