Rent Increase thread

boardfriek

It seems to go around these days that people get letters with the announcement that their rent is going to go up significantly. I heard of adjustments up 250 Euro's per month. I wonder if the goverment is wanting to do something about this since most likely nobody is gonna get a pay raise at the same level.

skallywag

In central European countries the rent is defined in the rental contract between tenant and landlord and cannot be increased outside of this for the duration of the contract. Does such a contract not also exist in Ireland in order to safeguard against such increases?

matrim

skallywag wrote: »

In central European countries the rent is defined in the rental contract between tenant and landlord and cannot be increased outside of this for the duration of the contract. Does such a contract not also exist in Ireland in order to safeguard against such increases?

It does but most leases are for a year in duration.

Outside of a contract it is only possible for a landlord to increase the rent once a year to the current market rate

zl1whqvjs75cdy

boardfriek wrote: »

It seems to go around these days that people get letters with the announcement that their rent is going to go up significantly. I heard of adjustments up 250 Euro's per month. I wonder if the goverment is wanting to do something about this since most likely nobody is gonna get a pay raise at the same level.

In short, no. There is a massive shortage of rental accommodation at the moment, particularly in Dublin. Until more units get built there is little that can be done about the situation. If the government made moves towards capping rents or controlling rent prices you would see a lot of professional landlords leaving the market as the return would not be there for them. This would lead to an even bigger shortage of suitable units.

I agree that people aren't getting pay rises to keep up with rents, but I think the market is being heavily skewed by the IT workers, many of whom start on very good money straight out of college. So while you or I might not be able to afford the rent jumps, there is a long line of commitment free, relatively well off 20 somethings who are more than happy to pay.

skallywag

matrim wrote: »

It does but most leases are for a year in duration.

That's interesting. I would imagine that Ireland will need to align more with other European countries where renting has been traditionally strong if the renting scenario is really going to be taken more seriously. A large amount of European rental agreements are three year minimum where the terms get locked in, with the capability to exit the agreement after the first 12 months with 3 months notice.

handlemaster

boardfriek wrote: »

It seems to go around these days that people get letters with the announcement that their rent is going to go up significantly. I heard of adjustments up 250 Euro's per month. I wonder if the goverment is wanting to do something about this since most likely nobody is gonna get a pay raise at the same level.

The increase doesnt matter as long as it's within local area rent prices. You will also have tenants who have enjoyed below market rental rates for a long while and get a shock when it goes up. No complaints when the landlord makes a loss on their rental from the tenant

boardfriek

Thank you for your comments so far. The problem that I see in this case is the fact that the tennant finds himself trapped in a situation were he either pays a higher rent or move to a different property. But again there is either not much available or you end up with the same level of rent. Feels kind of getting black mailed and the end of the day.

handlemaster

boardfriek wrote: »

Thank you for your comments so far. The problem that I see in this case is the fact that the tennant finds himself trapped in a situation were he either pays a higher rent or move to a different property. But again there is either not much available or you end up with the same level of rent. Feels kind of getting black mailed and the end of the day.

Is the new rent above rents in the area?

boardfriek

handlemaster wrote: »

Is the new rent above rents in the area?

I opened this topic to have a general discussion before I am facing the same situation. But I am curious what could be done once you receive something like this. How you find out if it's above average and what can be done?

skallywag

boardfriek wrote: »

... and what can be done?

Well unless it's breaching your contract agreement then I would imagine that nothing can be done. You can always try to reason with the landlord, if they see you as a decent reliable tenant then you may have some leverage. But if they feel that they can genuinely command that level of rent from the current market then you may either have to meet the expectation of else move out.

Peregrinus

You can look at letting advertisements, estate agents listings, etc, to get a feel for rental levels in the area. If you think the rent increase is too high you can (a) give notice to quit, and rent somewhere cheaper, or more probably (b) tell the landlord's agent that you think the rent increase is too high, say what you think a reasonable rent increase would be and invite the landlord to accept that with the threat that, if he doesn't, you'll give notice to quit.

athtrasna

boardfriek wrote: »

Thank you for your comments so far. The problem that I see in this case is the fact that the tennant finds himself trapped in a situation were he either pays a higher rent or move to a different property. But again there is either not much available or you end up with the same level of rent. Feels kind of getting black mailed and the end of the day.

It's not blackmail, it's a suppliers' market. Nobody is forcing you to stay. You have an alternative, to move out.

boardfriek

athtrasna wrote: »

It's not blackmail, it's a suppliers' market. Nobody is forcing you to stay. You have an alternative, to move out.

You are not getting the point.The market does NOT give you a lot of choice as there is either not a lot available in the same condition or area neither for the same price.

Michael D Not Higgins

boardfriek wrote: »

You are not getting the point.The market does NOT give you a lot of choice as there is either not a lot available in the same condition or area neither for the same price.

If someone else is willing to pay the increase, why should the landlord be stuck with a tenant who won't?

boardfriek

Michael D Not Higgins wrote: »

If someone else is willing to pay the increase, why should the landlord be stuck with a tenant who won't?

I was referring to my point of view. Sorry but you start mixing things up.

skallywag

Michael D Not Higgins wrote: »

If someone else is willing to pay the increase, why should the landlord be stuck with a tenant who won't?

From a landlord's perspective having a reliable, stable and minimum hassle tenant is a massive plus. It's often worth more than a perspective rent rise which means losing the tenant.

Michael D Not Higgins

boardfriek wrote: »

I was referring to my point of view. Sorry but you start mixing things up.

The market is not blackmailing anyone. The market is made up of punters who want to live in your area and are willing to pay more than you're paying. This drives up the price and justifies the landlord looking for a rent increase.

People complain here about their €200 rent increase, but they haven't had a rent increase in years. This only indicates that the landlord was allowing them to live there below market rate for a while before looking for an increase.

skallywag wrote: »

From a landlord's perspective having a reliable, stable and minimum hassle tenant is a massive plus. It's often worth more than a perspective rent rise which means losing the tenant.

This would feed into my point above. The landlord will usually settle for less than the market rate for these qualities and some have done for years already. Proposing a rent increase of €200 could end with a compromise of €100. This allows the landlord to increase their taking while keeping a good tenant and the tenant continues in a below market rate apartment.

skallywag

Michael D Not Higgins wrote: »

This would feed into my point above. The landlord will usually settle for less than the market rate for these qualities and some have done for years already. Proposing a rent increase of €200 could end with a compromise of €100. This allows the landlord to increase their taking while keeping a good tenant and the tenant continues in a below market rate apartment.

Agreed, splitting the difference is often a very good compromise. It's unreasonable of a tenant and unfair to a landlord to expect no rise whatsoever when the market is clearly saying otherwise.

boardfriek

skallywag wrote: »

From a landlord's perspective having a reliable, stable and minimum hassle tenant is a massive plus. It's often worth more than a perspective rent rise which means losing the tenant.

Plus the the costs for the landlord having to renovate and refurbish a place compared to a tenant who kept it fairly maintained.

Terrlock

What the government could do, is work to develop proper infrastructure in other region's of the country.

Develop rural telecommunications so it's up to the standard companies require.

There also should be possible to start working from anywhere really in the IT sector.

Working from home, should be more of an option.

To many Jobs are focused in and around Dublin. With Rural Ireland having basically nothing to keep them going.

awec

On the subject of the market rate, having the highest rent in the area is not really an issue. Firstly, you need to compare like for like, eg 2 bed apartments vs 2 bed apartments with similar or the same features.

There is no point comparing a 2 bed apartment with a south facing balcony that overlooks the sea or something, with a 2 bed apartment with a north facing balcony where you're looking into the next door neighbour's bathroom.

Even if they are very similar, you would have to show that your rent is significantly above the average. If you're paying an extra 50 quid a month than everyone else you're unlikely to get anywhere if you complain.

Tar.Aldarion

dreading an increase since I've had 4 years with none, heres hoping they still keep it as is haha (not likely)

awec

IMO if you rent off a letting agency who maintains a portfolio of properties you are more likely to see increases than if you rent off a private landlord who manages their own property (and probably just the one property).

Yes, it's a generalisation but that has been my experience. I believe the former are more likely to be up to date with the current market status, and are more willing to go through a change of tenant if required.

murphaph

Terrlock wrote: »

What the government could do, is work to develop proper infrastructure in other region's of the country.

Develop rural telecommunications so it's up to the standard companies require.

There also should be possible to start working from anywhere really in the IT sector.

Working from home, should be more of an option.

To many Jobs are focused in and around Dublin. With Rural Ireland having basically nothing to keep them going.

Ah the old Dublin v Everywhere else in the whole country post.

Are there too many jobs in Cork City and Galway City too? Maybe Pfizer should relocate to wherever you live, to spread the butter around a bit more, eh?

The very last thing Ireland needs is less focus on our (terribly neglected, when compared to the rest of Europe!!) cities. Dublin has absolutely appalling public transport for a city its size. Same goes for our other large urban centres.

The reality is that not that many jobs can be done remotely in a genuinely productive way. Even in my industry (computer programmer), where the preconditions for remote working are amongst the best you'll find, the actual numbers of people doing it are low. Hands on jobs are simply impossible to do remotely. Even for those who do work remotely, they will generally be expected in the office for face to face meetings at regular intervals. Video conferencing is limited in the interaction it can offer right now.

People will continue to migrate to the cities as they have been doing for thousands of years now. The solution is to build better public transport in and around the cities and to build UP. Dublin has millions of cubic kilometres of untapped living space...above our heads. You just have to be "brave" enough to build higher than the handful of storeys Dublin City Council seems to think is "high rise" lol.

TheDoc

awec wrote: »

IMO if you rent off a letting agency who maintains a portfolio of properties you are more likely to see increases than if you rent off a private landlord who manages their own property (and probably just the one property).

Yes, it's a generalisation but that has been my experience. I believe the former are more likely to be up to date with the current market status, and are more willing to go through a change of tenant if required.

Agreed.

Letting agencies who run properties in my area, have all had price increases to €1500-€1600 since February.

I'm in arguably the biggest property in the estate, and didn't get a price hiek this year., paying €1250. I deal with the landlord direct, I'm in his only property, and its for his kids to either live in or sell when they grow up.

So its entirely possible unless there is a big shift in his life, I could stay in the place for a good 15 years.

We have a good rapport, I fix and deal with most issues that arises in the house myself, and I'm hoping that the government will do something to tackle supply issues, so I can try haggle a slightly reduced rent.

The same place was going for €900 before the market went mental over a year ago.

Beagle Boy

Based on the details provided on the new rent controls (http://www.thejournal.ie/alan-kelly-rents-housing-2435446-Nov2015/) can anyone explain to me why landlords are rushing to iincrease rents before the legislation comes into affect (there are a few threads here already about recent increases).

If someone's rent has been reviewed already this year then the legislation will mean it cant be changed for 2 years rather than 1. If its over a year since rent has been reviewed then I'm not sure I understand why it matters whether that review happens before the legislation in enacted or after. The one reason I can see for it is that the new legislation indicates that a landlord must give 3 months notice so if a landlord did intent to increase the rent he misses out on two months of the inreasesd rate if he waits until after the legislation comes into affect.

Am I missing something obvious here?
BB

Gumbo

Contrary to wide spread misprint of rental issues, there are many many landlords that have not increased rent year on year as a good tennant who looks after the place is worth more than an extra €200 per month that most of will go to revenue either way!

Some are now getting the price up as they know they can't raise it within the next 2 years.

quadrifoglio verde

If I was a landlord, I'd be waiting until January to raise the rent. The market rate will have risen sharply in the previous 2 months meaning that they can lock in a higher rate for themselves, as many landlords as the op says are rushing to increase rates.

Selik

I've been currently reviewing the rent with my tenants and proposed a modest increase while still keeping the rent below market, with the last review being in October 2014 with the rent changing in January 2015.

We've been back and forth over a few emails the last weeks with some haggling but not firm agreement as of yet. They are now asking if the rent freeze applies here to their current rent, which was agreed in October 2014 and came into effect in January 2015. I don't think it does and that the new agreed amount now that we're scheduling to come into effect in January 2016 will be the frozen amount. Is there anyway to clarify this definitively?

antoinolachtnai

There is no rent freeze as such. There are changes proposed but there is nothing in law.

Selik

antoinolachtnai wrote: »

There is no rent freeze as such. There are changes proposed but there is nothing in law.

Yes correct, however would I be incorrect to assume that the timeline I'm working off is based on "when" the rent has last been reviewed and agreed (ie Oct 2014) rather than the actual month the increase kicks in?

antoinolachtnai

ah. I think you are technically correct if you look at http://www.irishstatutebook.ie/2004/en/act/pub/0027/sec0020.html .

So you might actually be able to increase the rent in 28 days from now, but it is arguable.

Once you give notice of the rent increase before or around beginning of december (allowing 28 days before 1 january) then I don't see any problem with increasing it on January 1.

Am I understanding you correctly?

April 73

This is an interesting question. I reviewed a tenant's rent in Nov 2014, giving 56 days notice of an intended increase to apply from Jan 1st 2015, which was agreed.

So if this rent freeze becomes law & applies to retrospective increases - is the date of review & agreement relevant or just the date the actual increase took place & applied from?

The rent is currently at about 80% of the going rate in the area & I had intended to apply an increase to bring it to about 90% of the going rate from Jan 2016. My tenants are good, the house is well looked after & I have no interest in sqeezing the max possible out of the tenants. I have reduced the rent in the past when rates were falling, I haven't increased the rate as much as the market over the last number of years. If I am stuck until Jan 2017 I will be very significantly behind the market by then.

I cannot see rents being at a similar level to today in 12 months time. I think this rent freeze is going to have the exact opposite effect of its intention in the next 12 or 18 months. Pre-emptive increases now where LLs can raise rents & very significant rises in a year's time for anyone who whose rent freeze ends on Jan 1st 2017.

I suspect we will see the law of unintended consequences apply.

April 73

Rumour & speculation about what rent control would mean has spooked landlords.

Many who were charging below the market rate are worried that they would be handcuffed into a below-market rate for years to come. Some of those LLs are now increasing rents to bring them closer to market rates.
Others who are in a position to apply an increase may have been thinking of increasing by x for the next year. Now that it's two years before the next review they are increasing by x + another bit.
These increases will push up average rates in an area.

I think this rent freeze idea is only going to produce a spike in rents now & another spike in Jan 2017 when rents frozen from Jan 2015 can be increased.

rubberdiddies

April 73 wrote: »

Rumour & speculation about what rent control would mean has spooked landlords.

Many who were charging below the market rate are worried that they would be handcuffed into a below-market rate for years to come. Some of those LLs are now increasing rents to bring them closer to market rates.
Others who are in a position to apply an increase may have been thinking of increasing by x for the next year. Now that it's two years before the next review they are increasing by x + another bit.
These increases will push up average rates in an area.

I think this rent freeze idea is only going to produce a spike in rents now & another spike in Jan 2017 when rents frozen from Jan 2015 can be increased.

I feel this is exactly what will happen. I have been charging approximately 20% below market rate for the last number of years and had planned to keep it roughly the same this year.....due for renewal early December.

But now because I won't be able to increase it again until December 2017 I have sent a letter increasing the rent to slightly under (about 3% under) market value.

I feel Minister Kelly has forced me into this and don't apologise for doing so.

I'm sure many other landlords who were happy to keep below market value will now increase to market value.

I don't think Alan Kelly or his advisors thought this through very well.

I personally don't consider me being a landlord to be a business but of course many do. And so if being treated as a business, why aren't grocery price controls brought in just the same? Not a great example but I'm sure you get what I'm trying to say

guideanna

May i ask where you would find out a "market rate" of your property?
Is it just a case of looking at similar properties in the area on daft etc?

allibastor

guideanna wrote: »

May i ask where you would find out a "market rate" of your property?
Is it just a case of looking at similar properties in the area on daft etc?

Price of similar size and condition properties in your area is a good guess.

then up or down by a figure depending on how much you wish to charge.

catbear

April 73 wrote: »

I think this rent freeze idea is only going to produce a spike in rents now & another spike in Jan 2017 when rents frozen from Jan 2015 can be increased.

I reckon you're right about a rent spike now but by the time we get to 2017 I believe we'll be seeing a swing back in favour of renters. One of the main pushes of rents in the last two years has been investors trying to offload on the house price bounce.
Pain for the renter today but the two year rule will be a boon when the market swings.

allibastor

April 73 wrote: »

This is an interesting question. I reviewed a tenant's rent in Nov 2014, giving 56 days notice of an intended increase to apply from Jan 1st 2015, which was agreed.

So if this rent freeze becomes law & applies to retrospective increases - is the date of review & agreement relevant or just the date the actual increase took place & applied from?

The rent is currently at about 80% of the going rate in the area & I had intended to apply an increase to bring it to about 90% of the going rate from Jan 2016. My tenants are good, the house is well looked after & I have no interest in sqeezing the max possible out of the tenants. I have reduced the rent in the past when rates were falling, I haven't increased the rate as much as the market over the last number of years. If I am stuck until Jan 2017 I will be very significantly behind the market by then.

I cannot see rents being at a similar level to today in 12 months time. I think this rent freeze is going to have the exact opposite effect of its intention in the next 12 or 18 months. Pre-emptive increases now where LLs can raise rents & very significant rises in a year's time for anyone who whose rent freeze ends on Jan 1st 2017.

I suspect we will see the law of unintended consequences apply.

Just to point out as MANY have said here, if you have good tenants and are not at risk of losing money on your property, leave the rent alone. having a good tenant is worth the extra few quid a week.

I had a post going about wanting to become a LL. A conversation I had last night with a friend of mine who rents 2 apartments in Dublin. All I can say is holy crap!! He said one tenant when they left the house knew he wasnt getting his deposit back so drilled holes in the wall with a 2" core drill. He was a direct debit paying worker in a large web based company in Dublin, so not a RA head the ball.

All I can say is I was shocked by his stories.

Dinarius

We have tenants who renewed their lease in September for a second year.

The rent is the same as it was in year one.

Under Kelly's Law, when it comes to renewal time again in September 2016, will we be barred from increasing the rent (because it will be only a year, or so, since he introduced it) or will we be able to increase the rent because they will have had two years at the current price?

Secondly, if they don't renew and move out, will we be able to set the rent for the new tenants at the higher rate?

Thanks.

D.

Butters1979

allibastor wrote: »

Just to point out as MANY have said here, if you have good tenants and are not at risk of losing money on your property, leave the rent alone. having a good tenant is worth the extra few quid a week.

I had a post going about wanting to become a LL. A conversation I had last night with a friend of mine who rents 2 apartments in Dublin. All I can say is holy crap!! He said one tenant when they left the house knew he wasnt getting his deposit back so drilled holes in the wall with a 2" core drill. He was a direct debit paying worker in a large web based company in Dublin, so not a RA head the ball.

All I can say is I was shocked by his stories.

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

allibastor

Butters1979 wrote: »

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

It is more advice than anything. I wouldnt really worry about what to increase a rent to if he is covered and has a hassle free tenant.

Butters1979

The law is you cannot increase the rent until two years after the last increase or from the original lease. So come next September it will be 2 years since any increase and therefore you are able to increase the rent.

If they move out the lease is finished and has no affect on any new lease with different people, you can then put the property on the market for whatever price you want.

allibastor

Butters1979 wrote: »

What's this got to do with the OP's question?
He is perfectly within his right to increase rents in line with market rates, and threats about tenants destroying his property should not scare a LL into leaving rents alone.

To OP, from what I can tell, when the new rules kick in , it's form when the last increase took affected (not when it was given notice). But I find it hard to clarify that.

And in asnwer to the OP's question, that is the problem with this new "law" No one actually knows what the situation is, hence why there is a panic in the rental increase.

Dinarius

Butters1979 wrote: »

The law is you cannot increase the rent until two years after the last increase or from the original lease. So come next September it will be 2 years since any increase and therefore you are able to increase the rent.

If they move out the lease is finished and has no affect on any new lease with different people, you can then put the property on the market for whatever price you want.

Makes sense and what I'd hoped.

Many thanks.

D.

allibastor

catbear wrote: »

I reckon you're right about a rent spike now but by the time we get to 2017 I believe we'll be seeing a swing back in favour of renters. One of the main pushes of rents in the last two years has been investors trying to offload on the house price bounce.
Pain for the renter today but the two year rule will be a boon when the market swings.

No, we wont. If the price in an area is increased and people will pay this due to lack of supply. This will become the norm for that area.

In 2017 when rents have been at this norm for a while it will only take 1 or 2 greedy LL to advertise for more rent again and this will push the level to a new higher rate.

Unfortunately for all renters this law will not make it easier for renters. The only thing to do is increase supply of rental accommodation and make it more attractive to be a LL.

Lux23

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

aido79

allibastor wrote: »

No, we wont. If the price in an area is increased and people will pay this due to lack of supply. This will become the norm for that area.

In 2017 when rents have been at this norm for a while it will only take 1 or 2 greedy LL to advertise for more rent again and this will push the level to a new higher rate.

Unfortunately for all renters this law will not make it easier for renters. The only thing to do is increase supply of rental accommodation and make it more attractive to be a LL.

Exactly. Aren't landlords always going to be thinking 2 years ahead every time they rent out a property to a new tenant? More laws to deal with problem tenants who give other tenants a bad name is a better option as it encourages landlords to stay in the market. More landlords = more properties for rent. Landlords leaving the market and selling up = less properties for rent. In the current market with property values not likely to rise to the extent that they did in the past buy to let would be a poor investment compared to other investments so coming up with ways to keep landlords or potential landlords interested should be more important than trying to implement rent controls which have already been proven to be ineffective in the past.

housetypeb

Lux23 wrote: »

Because some are greedy profiteering louts. The highest rents in 7 or 8 years yet they are still somehow the victims.

Landlords are not charities, they are a business. They are entitled,like all business's, to charge as much as the market will bear at any given time.

catbear

allibastor wrote: »

No, we wont. If the price in an area is increased and people will pay this due to lack of supply.

The years of prices drops meant that there was a pent up cohort of buyers with cash who held off. They've reentered and prices increased.
Others see this as a chance to bail out of property sell up too.

If there was real and not just pent up demand then banks would be lending to developers too. They're not.

I'm looking at the same bank owned empty houses in my neighbourhood for years now. House prices have risen but there's no shortage of empty houses for sale, including houses that had been rented out during the bust phase.

whiskeyman

I havent seen this answered anywhere:
Can rents be brought down within the 2 years once locked in?
Is it 'fixed', or just that it can't be reviewed upwards?