Landlords would have continued to “run out of the market at an exponential rate” if the Government had not ended the ban on evictions, according to an estate agent.
Carrick-on-Shannon-based estate agent Joe Brady said tax breaks and an overhaul of the rental-dispute resolution process is also needed “to stop the rot”.
Mr Brady – a board member of Real Estate Alliance (REA), which has 50 members around the country – said 35 per cent of their sales were by landlords leaving the market.
The Co Leitrim letting agent said he admired the “bravery and honesty” of Ministers who knew they were going to be “absolutely slaughtered” for ending the ban, which showed they had a “right good reason” to do so.
A survey of 1,000 sales completed by REA members around the country showed that 35 per cent of vendors in 2021 were landlords wanting out of the sector, and that figure is expected to be similar in 2022, said Mr Brady. “We were blown away by that finding. We didn’t expect it.”
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In previous decades an average of 20 per cent cent of sales were by landlords opting out of the rental market, according to the REA director.
He said every time the Government introduced a new measure regulating the sector – for example requiring landlords to register tenancies every year, it triggered another exodus by landlords. “But the biggest single trigger of the whole lot bar none is the tenant who does not pay the rent and finally leaves the property in a mess, after burning the landlord for six months.”
Mr Brady said that contrary to the system in places such as New York and Australia, where there were special courts to deal quickly with landlord/tenant disputes, landlords here were “as well to be shouting at the moon” when seeking to have a genuine grievance resolved.
Even if successful at a Residential Tenancies Board (RTB) hearing, landlords in dispute with tenants would most likely then face an appeal or RTB tribunal, and even if successful there a lengthy court process could follow, he said.
“If you have €10,000 worth of damage you have to repair it and keep your invoices. You bring a District Court action against the tenant for damages. That wings it ways through the District Court for another six months and then you get a judgment and they won’t pay, so you go back and get an attachment on their wages or if it’s the dole it will be a tenner a week. It is ridiculous. There is no end to it.”
Mr Brady, who gets up to 30 queries for every rental property coming on the market and up to 10 “serious offers”, said that given the tax on rental income and the increase in house prices, most landlords were realising they would be better off selling.
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In Dublin a landlord of multiple properties described the rental market as “completely dysfunctional” and “not a good investment at the moment”.
Joe Doyle (38) – a landlord from Clondalkin, southwest Dublin – said the rental market was the “best game in the world” until something goes wrong with a tenancy. “Then it’s the worst.” He said there was not enough protection for landlords in cases where tenants ran up rent arrears or damaged the property.
The RTB was too slow in taking decisions, with landlords often left without a way to collect rent arrears even after winning a case, he said. “Every time we need to renew a lease, serve a notice, the rules have changed. It’s just a joke.”
The Government had “chased the landlords out of the market” and needed to look at policies to incentivise them back, Mr Doyle said.
“There’s no shortage of houses, there’s a shortage of rental houses,” said Mr Doyle who was at the centre of controversy in 2020 when he posted a video on social media saying you could “pack” two families into a former council home and charge €5,000 in rent between them – he later said the video had been a “complete joke”.
The Government has said it is considering introducing a policy to give renters an option to buy the property if their landlord opts to sell the home. Commenting on the proposals, Mr Doyle said in many cases if a landlord got market rate when selling their property they would be happy. However, he said he would have concerns if the policy resulted in landlords being blocked from selling properties to a family member.
On the question of profitability, Mr Brady said a property in Dublin making €24,000 a year in rent might lose €4,000 of that in letting fees, management charges, insurance and repairs, and then the €20,000 could be cut to €10,000 after tax for those on the top rate. But if the property was worth €400,000, landlords who opted to sell could make 2½ per cent on their investment with “no risk and no hassle”, he said.
“The facts were staring the Minister for Housing in the face. Everything done so far has made the problem worse not better,” said Mr Brady. “What they did was brave, and it definitely wasn’t populist. It wasn’t going to win votes. But if he is trying to solve the problem he cannot run any more landlords out of the market.”
Mr Brady said his Carrick-on-Shannon office had given at least one notice to quit a week for the last five weeks, and even with this week’s decision landlords needed more reasons, such as tax breaks and an efficient dispute resolution process, to stay in the sector.
Meanwhile the chief executive of North West Simon has said that 20 families in counties Sligo and Leitrim that had been served with notices of termination were facing homelessness following the lifting of the moratorium.
