Rent control only to add fuel to the fire of higher rents

handlemaster

http://www.irishtimes.com/news/social-affairs/report-says-rent-controls-would-make-things-worse-for-tenants-1.1973384

As suspected rent control would be worse news for tenants. Also good to see thé y recognised taxes are to high on landlords.

Michael D Not Higgins

Rent control doesn't cause higher rent, it constricts supply and just makes it harder to rent.

The PRTB are calling for control and rules between banks, landlords and tenants on BTL mortgages as an alternative measure. Landlords can't cover the mortgage with the rental income and repossessions cause hassle for all involved.

drumswan

handlemaster wrote: »

http://www.irishtimes.com/news/social-affairs/report-says-rent-controls-would-make-things-worse-for-tenants-1.1973384

As suspected rent control would be worse news for tenants. Also good to see thé y recognised taxes are to high on landlords.

Dont see how reducing tax on landlords would help anyone other than landlords. They are not likely to decrease rents while there is such a lack of supply, instead the they'll just pocket the money.

Zzippy

drumswan wrote: »

Dont see how reducing tax on landlords would help anyone other than landlords. They are not likely to decrease rents while there is such a lack of supply, instead the they'll just pocket the money.

High tax is an upward pressure on rent - many landlords simply cannot afford to accept a lower rent as the current rent minus (tax + PRSI + USC + expenses) is not sufficient to cover mortgage costs in many cases.

If we had a normal functioning property market with normal level of supply rent control might work.

drumswan

Lack of supply (in Dublin anyway) is enough upward pressure on rents at the minute that other factors are less relevant.

Michael D Not Higgins

drumswan wrote: »

Lack of supply (in Dublin anyway) is enough upward pressure on rents at the minute that other factors are less relevant.

Supply is dictated by a number of things, and increasing costs on landlords along with rising property prices see them cash out and the supply to contrict. Ensuring landlords stay in the market helps the supply.

Edit: also tax breaks may encourage others to enter the market and increase supply.

hmmm

Another simplistic solution shot down, which is good. It won't stop politicians and "community activists" calling for it however.

maringo

I'd be very much in favour of rent control. Landlords who feel they aren't making enough money can always sell up. Tenants wouldn't be fleeced as they currently are and properties coming onto the market for sale should help to ease the shortage for people wanting to buy. Win win situation in my view. But then I'm not a landlord....

handlemaster

maringo wrote: »

I'd be very much in favour of rent control. Landlords who feel they aren't making enough money can always sell up. Tenants wouldn't be fleeced as they currently are and properties coming onto the market for sale should help to ease the shortage for people wanting to buy. Win win situation in my view. But then I'm not a landlord....

Wouldnt follow through like that.

How much profit do y ou think a landlord gets from 1000 rent received each month.. on average ?

If didnt Know the government want very little to do with taking on more social housing.

maringo

Profit percentage would depend on their initial capital investment and outgoings - maintenance etc. and of course having decent tenant who treats property with respect is essential. I do think that all expenses including interest in running the business should be tax deductible. I've been both a tenant and a landlord in the past. The current housing emergency can only be addressed by building houses. But I do believe rent control is an essential protection for citizens who will always have a requirement to rent their home.

hfallada

maringo wrote: »

I'd be very much in favour of rent control. Landlords who feel they aren't making enough money can always sell up. Tenants wouldn't be fleeced as they currently are and properties coming onto the market for sale should help to ease the shortage for people wanting to buy. Win win situation in my view. But then I'm not a landlord....

But you are forgetting that 70% of LLs have mortgages. If they are in negative equity of 200k. They can't sell their house to get out of the rental business. They will try and wait for the house prices to increase enough that they sell to break even and get out.

There is a term called cost plus inflation. Which is when a supplier increase prices to compensate for higher costs. The rental market is a prime example. Most LLs have only increased rent to cover the higher taxes on them. PRSI on rental income is a joke. PRSI is supposed to be an "insurance" not a tax. A LL will never get unemployment benefit from renting their property.

An better solution to solving the crisis is to allow higher buildings in Dublin city. 8 storeys is far from high rise and will allow more density per development. DCC should demolish their 3 storey generic houses all over the inner city and replace them with 8-10 storey apartment blocks

maringo

I agree that higher density is needed and we should go higher with a mix of apartment complexes designed both for family living and couples/singles rather than one and two bed apartments as has been the case to date. Going off topic I can't understand why NAMA is allowed to sell off blocks of apartments to venture funds while there is such a demand for single properties in the capital.

handlemaster

maringo wrote: »

I agree that higher density is needed and we should go higher with a mix of apartment complexes designed both for family living and couples/singles rather than one and two bed apartments as has been the case to date. Going off topic I can't understand why NAMA is allowed to sell off blocks of apartments to venture funds while there is such a demand for single properties in the capital.

The buyers will rent out the properties dont see the problem. Nama is directed to get best return for the irish people.

handlemaster

A big problem for landlords is problem tenants big risk every time. Basically there is no quick way to get rid of such tenants. For tenants and landlords longer fixed rental periods would be better with some sort of protection scheme to guarantee rent. Rental periods of three years plus. Higher deposits also or insurance for non payment/ damages paid upfront by tenant. Then rental prices could drop.

the_syco

drumswan wrote: »

Dont see how reducing tax on landlords would help anyone other than landlords. They are not likely to decrease rents while there is such a lack of supply, instead the they'll just pocket the money.

Mortgage + tax = too dear to let, so sell house, and one less rental property.

maringo wrote: »

I'd be very much in favour of rent control. Landlords who feel they aren't making enough money can always sell up.

A house housing 5 people renting will house 2 who bought it.

maringo wrote: »

The current housing emergency can only be addressed by building houses.

Correction; the current housing emergency can only be addressed by building lots of houses in Dublin, as it seems houses outside Dublin don't count.

handlemaster wrote: »

A big problem for landlords is problem tenants big risk every time. Basically there is no quick way to get rid of such tenants. For tenants and landlords longer fixed rental periods would be better with some sort of protection scheme to guarantee rent. Rental periods of three years plus. Higher deposits also or insurance for non payment/ damages paid upfront by tenant. Then rental prices could drop.

This. Having a third party hold the rent, and laws to evict non-paying tenants quicker would help ensure that houses are not held up. Also so that they don't bankrupt the landlord whilst they're not paying rent.

gaius c

handlemaster wrote: »

The buyers will rent out the properties dont see the problem. Nama is directed to get best return for the irish people.

Not quite on topic but is selling entire blocks for a hefty discount with an opaque bidding process really the best possible deal for the taxpayer?

maringo

A house purchased by 2 people can house a family of whatever size they wish and house elderly parent/s too if they wish to so it doesn't follow that there is a loss of housing if house is purchased rather than being rented. Of course the demand for housing both to rent and purchase in Dublin is not being currently met. Subsidies to landlords is not the answer.

handlemaster

gaius c wrote: »

Not quite on topic but is selling entire blocks for a hefty discount with an opaque bidding process really the best possible deal for the taxpayer?

If its the best price to be gotten on the open market and it is on the open market then its not been sold as a discount. We all know about the banks loans been taken over by NAMA this is old news, here and now is what matters. Anyone can bid for NAMA properties if you have the funds.

gaius c

handlemaster wrote: »

If its the best price to be gotten on the open market and it is on the open market then its not been sold as a discount. We all know about the banks loans been taken over by NAMA this is old news, here and now is what matters. Anyone can bid for NAMA properties if you have the funds.

No you can't. The properties mentioned during the week are NOT for sale to ordinary schmos even though they would pay more for them.

Michael D Not Higgins

gaius c wrote: »

No you can't. The properties mentioned during the week are NOT for sale to ordinary schmos even though they would pay more for them.

These apartments are mostly already rented so ordinary schmos wouldn't be able to draw down a mortgage on the place anyway. They're investment properties to be sold to investors.

handlemaster

gaius c wrote: »

No you can't. The properties mentioned during the week are NOT for sale to ordinary schmos even though they would pay more for them.

Your clearly not getting how a business like NAMA should be run. Its more cost effect i.e. get better price for the assets when selling this way.

handlemaster

Alot of posters compare Dublin to US cities ..might find this report interesting. States home ownership is cheaper than renting by 38%