How do we actually fix the rental market?

3DataModem

yer man! wrote: »

I'm not a home owner yet (saving for it) and have the experience of renting in Ireland in multiple cities over the past few years. I'm just wondering, how do we fix the rental market in Ireland? The high cost, the low quality, the lack of supply, the overcrowding, the crap protections for both the landlords and the tenants, the only viable option being to house share....

How do we actually make it better? I've been contacting politicians for the past 5 years here and always get the same response of toothless policies they have mentioned they're using to fight the problem but clearly there's very little progress.

It honestly feels like we are where we are by design, i remember the time when we had thousands upon thousands of vacant properties all over the country, perhaps I am looking through rose tinted glasses but it definitely seems like we're not heading in the right direction.

Enforcement.

1. Guaranteed Quality
A system where a tenant can pay 75.00 for an inspection, and if the property fails (apart from wear and tear or recent issues) the landlord covers the fee (deducted from rent) and if not remediated in 30 days, the tenant deducts a fine from the rent and submits it to the inspection authority. This could initially be a voluntary service for landlords to opt-in to, and could be included in the advertisement.

2. Landlord Protection
A system where a landlord can get a bailiff to eject a tenant after 60 days of zero rent.

3. Tenant Enforcement
A system where the RTB can put a lien on state future income (tax credits, social welfare, tax refunds) of defaulting tenants. This may also encourage renting to SW recipients.

4. Long Term Tenancies
Long term leases with market rent adjustments capped at CPI + 2%, with a framework for rent reduction for maintenance / improvement by tenant.

Government buildings

As regards rental income, say you expect to get €1k income per month from your rented house which is fully owned by you, you would need another rented house fully owned by you yielding another €1k per month to give to the taxman.

Government buildings

Some of the reasons property prices are too high is that the building regulations are too expensive, health and safety regs are ridiculously high, and higher standards of insulation etc all result in higher costs.

Meathman12

Government buildings wrote: »

Some of the reasons property prices are too high is that the building regulations are too expensive, health and safety regs are ridiculously high, and higher standards of insulation etc all result in higher costs.

Which h&s regs?

Will the higher standard of insulation not mean lower heating costs?

Meathman12

3DataModem wrote: »

Enforcement.

1. Guaranteed Quality
A system where a tenant can pay 75.00 for an inspection, and if the property fails (apart from wear and tear or recent issues) the landlord covers the fee (deducted from rent) and if not remediated in 30 days, the tenant deducts a fine from the rent and submits it to the inspection authority. This could initially be a voluntary service for landlords to opt-in to, and could be included in the advertisement.

2. Landlord Protection
A system where a landlord can get a bailiff to eject a tenant after 60 days of zero rent.

3. Tenant Enforcement
A system where the RTB can put a lien on state future income (tax credits, social welfare, tax refunds) of defaulting tenants. This may also encourage renting to SW recipients.

4. Long Term Tenancies
Long term leases with market rent adjustments capped at CPI + 2%, with a framework for rent reduction for maintenance / improvement by tenant.

1 Good
2 Good but the number of days should be lower than the rental deposit. Maybe insist tenant pays an insurance policy to cover damage to property.
3 Good but ultimately could result in a bad SW tenant receiving little or no welfare for long term
4 Good but do you link it to cpi or mortgage interest? Does cpi loosely track the interest rates.

3DataModem

Meathman12 wrote: »

4 Good but do you link it to cpi or mortgage interest? Does cpi loosely track the interest rates.

CPI, not mortgage interest.

Wanderer78

Government buildings wrote:

Some of the reasons property prices are too high is that the building regulations are too expensive, health and safety regs are ridiculously high, and higher standards of insulation etc all result in higher costs.

The main reason has been in fact the deregulation of the financial sector, which has been more or less allowed to create as much money as it wants in the form of credit, it has been the fact of this ease of availability of credit, that has in fact caused the rapid rise in property and land prices, this has also been coupled with policies that have caused a low wage inflation environment, stagnant in some cases, along side increasing precariousness of employment, which has lead us into our current mess.

Dav010

Wanderer78 wrote: »

The main reason has been in fact the deregulation of the financial sector, which has been more or less allowed to create as much money as it wants in the form of credit, it has been the fact of this ease of availability of credit, that has in fact caused the rapid rise in property and land prices, this has also been coupled with policies that have caused a low wage inflation environment, stagnant in some cases, along side increasing precariousness of employment, which has lead us into our current mess.

Prior to Covid Ireland had almost full employment and amongst the best wages in Europe. Also, the CB rules on mortgages linking amount you can borrow to earnings is intended to reign in the amount you can borrow, so credit is not nearly as easy as it used to be before the last recession. It is also worth considering that a significant percentage of purchases are cash buys, nothing to do with easy credit.

https://www.google.ie/amp/s/www.irishtimes.com/business/economy/wage-growth-in-irish-economy-accelerates-at-fastest-rate-in-a-decade-1.3999939?mode=amp


Wages actually went up 6% in Q2, the highest increase on record.

https://www.cso.ie/en/statistics/earnings/earningsandlabourcosts/

The J Stands for Jay

Mad_maxx wrote: »

i dont mean that everyone with a fat savings account needs or wants to roll up their sleeves and become landlords but the money the thing could be done through some sort of pension plan

It's been available through pension plans for years. Not many people are interested because of the concentration of investment risk.

Wanderer78

Dav010 wrote: »

Prior to Covid Ireland had almost full employment and amongst the best wages in Europe. Also, the CB rules on mortgages linking amount you can borrow to earnings is intended to reign in the amount you can borrow, so credit is not nearly as easy as it used to be before the last recession. It is also worth considering that a significant percentage of purchases are cash buys, nothing to do with easy credit.

https://www.google.ie/amp/s/www.irishtimes.com/business/economy/wage-growth-in-irish-economy-accelerates-at-fastest-rate-in-a-decade-1.3999939%3fmode=amp


Wages actually went up 6% in Q2, the highest increase on record.

https://www.cso.ie/en/statistics/earnings/earningsandlabourcosts/

its well known that wage inflation has remained low in comparison to the value of assets, particularly in relation to property and land prices, this can be easily seen in the data, this has become the norm across the world, particularly with countries that have engaged in so called free market polices, Ireland being one.

central bank rules have virtually done nothing to prevent the rise of property and land prices, as there are still plenty of people, businesses, investment groups etc that have access to virtually infinite amounts of credit, the central bank rules have just locked a cohort of people out of these markets, my own region has just entered a major credit fueled development boom, property prices are already started to rise significantly, and id imagine speculation has already begun in regards property and land in the region due to these announcements.

yes, some purchases have indeed being largely cash, but you d find most of these individuals and business's havent been short of cash anyway, the average person cannot compete with this kind of behavior, these are the folks that are simply locked out of the market

Dav010

Wanderer78 wrote: »

its well known that wage inflation has remained low in comparison to the value of assets, particularly in relation to property and land prices, this can be easily seen in the data, this has become the norm across the world, particularly with countries that have engaged in so called free market polices, Ireland being one.

central bank rules have virtually done nothing to prevent the rise of property and land prices, as there are still plenty of people, businesses, investment groups etc that have access to virtually infinite amounts of credit, the central bank rules have just locked a cohort of people out of these markets, my own region has just entered a major credit fueled development boom, property prices are already started to rise significantly, and id imagine speculation has already begun in regards property and land in the region due to these announcements.

yes, some purchases have indeed being largely cash, but you d find most of these individuals and business's havent been short of cash anyway, the average person cannot compete with this kind of behavior, these are the folks that are simply locked out of the market

CB rules are there to prevent people borrowing more than they can afford, but if people can afford to borrow, I’m not sure the CB can prevent property prices rising as a result of cash purchases or people buying with mortgages linked to their wages.

It is difficult to believe that anyone/business has infinite access to credit, those days are gone I would have thought.

Surely property development in your region is a good thing when supply is needed? If you want to improve supply in the rental market, speculation is a normal part of that.

Wanderer78

Dav010 wrote: »

CB rules are there to prevent people borrowing more than they can afford, but if people can afford to borrow, I’m not sure the CB can prevent property prices rising as a result of cash purchases or people buying with mortgages linked to their wages.

It is difficult to believe that anyone/business has infinite access to credit, those days are gone I would have thought.

Surely property development in your region is a good thing when supply is needed? If you want to improve supply in the rental market, speculation is a normal part of that.

yes, again, cb rules have just prevented those who cannot afford to borrow from borrowing, but they have not prevented those than can afford to do so, in effect, the rules have just put a celling on top of those that cannot afford to borrow, locking them out of markets. credit is still available to those that can afford it, including towards external investors, and no, not much has truly changed in regards these matters, since the previous crash. we truly dont want to implement wealth taxes, particularly in relation to property and land, we still have a government who truly isnt all that interested in getting involved in increasing public housing stock, again, defaulting to the private sector to do so, including in financing this critical need, so yes, we re destined to repeat past failures, in relation to these issues.

yes, increasing supply will help my region, but increasing demand will cause increasing prices, i.e. a positive feedback loop of pricing has begun in my region, and its very unlikely wage inflation will increase at the same rate of property and land prices, so......

Dav010

Wanderer78 wrote: »

yes, again, cb rules have just prevented those who cannot afford to borrow from borrowing, but they have not prevented those than can afford to do so, in effect, the rules have just put a celling on top of those that cannot afford to borrow, locking them out of markets. credit is still available to those that can afford it, including towards external investors, and no, not much has truly changed in regards these matters, since the previous crash. we truly dont want to implement wealth taxes, particularly in relation to property and land, we still have a government who truly isnt all that interested in getting involved in increasing public housing stock, again, defaulting to the private sector to do so, including in financing this critical need, so yes, we re destined to repeat past failures, in relation to these issues.

yes, increasing supply will help my region, but increasing demand will cause increasing prices, i.e. a positive feedback loop of pricing has begun in my region, and its very unlikely wage inflation will increase at the same rate of property and land prices, so......

Something has truely changed, people’s borrowing is limited to what they can afford, not what they would like to borrow.

Wanderer78

Dav010 wrote: »

Something has truely changed, people’s borrowing is limited to what they can afford, not what they would like to borrow.

yes, for those that cannot meet the requirements, but nothing has changed for those that can meet the requirements, so not much has really changed, just a whole pile of people are locked out of the market, until they meet the requirements, or the requirements change

Dav010

Wanderer78 wrote: »

yes, for those that cannot meet the requirements, but nothing has changed for those that can meet the requirements, so not much has really changed, just a whole pile of people are locked out of the market, until they meet the requirements, or the requirements change

I’m struggling to see the point you are trying to make, the amount you borrow is now linked to what you can afford, that is the way it should be and is prudent regulation by the CB. Doesn’t the lending regs apply to everyone no matter who much you earn?

Wanderer78

Dav010 wrote: »

I’m struggling to see the point you are trying to make, the amount you borrow is now linked to what you can afford, that is the way it should be and is prudent regulation by the CB. Doesn’t the lending regs apply to everyone no matter who much you earn?

of course the regs apply to all, but some can already meet these regs, baring in mind, theres virtually nothing stopping external investors from entering the market, who already meet the regs

Dav010

Wanderer78 wrote: »

of course the regs apply to all, but some can already meet these regs, baring in mind, theres virtually nothing stopping external investors from entering the market, who already meet the regs

But if they meet the lending requirements, what is the issue? If the prospective landlord cannot afford to borrow, do you really want them entering the rental market?

Wanderer78

Dav010 wrote: »

But if they meet the lending requirements, what is the issue? If the prospective landlord cannot afford to borrow, do you really want them entering the rental market?

we have fooled ourselves into thinking requirements will prevent property and land prices from entering strong inflationary periods similar to the past, this is highly unlikely, because virtually nothing has changed in regards the access to credit, current requirements have just locked out a whole cohort of people from accessing these credit markets, yet this availability still actually exists, provided you meet requirements, many entities can meet these requirements, from individuals to major investors and investment groups, nothing has truly changed here

Biker79

The issue seems to be with those caught between being able to save up a deposit and get a mortgage, and those eligible for social housing support.

There seems to be a large gulf between these two cohorts. A sort of no-mans-land where too many people get stuck.

Fol20

Wanderer78 wrote: »

yes, again, cb rules have just prevented those who cannot afford to borrow from borrowing, but they have not prevented those than can afford to do so, in effect, the rules have just put a celling on top of those that cannot afford to borrow, locking them out of markets. credit is still available to those that can afford it, including towards external investors, and no, not much has truly changed in regards these matters, since the previous crash. we truly dont want to implement wealth taxes, particularly in relation to property and land, we still have a government who truly isnt all that interested in getting involved in increasing public housing stock, again, defaulting to the private sector to do so, including in financing this critical need, so yes, we re destined to repeat past failures, in relation to these issues.

yes, increasing supply will help my region, but increasing demand will cause increasing prices, i.e. a positive feedback loop of pricing has begun in my region, and its very unlikely wage inflation will increase at the same rate of property and land prices, so......

The ceiling for Cb is there for good reason. If people can borrow more money when they really can’t afford it. House prices will just go up more, developers will win here while ordinary people will be paying the mortgage into retirement. If you can’t afford it now are you suggesting they should be able to borrow more?

As long as people can afford it. What’s wrong if investors are in this bracket?

So people pay 50pc in tax. If they sell a property. They pay a further 33pc in any gains. They pay vat at 23pc and a whole load of other taxes yet you want to tax them further....I think they have already paid enough in tax, don’t you?

So your saying increasing supply will increase demand?I think demand already outstrips supply so until supply eventually meets demand which will take a very long time as it is. Maybe you think that way

Wanderer78

Biker79 wrote: »

The issues are those caught between being able to save up a deposit and get a mortgage, and those eligible for social housing support.

There seems to be a large gulf between these two cohorts. A sort of no-mans-land where too many people get stuck.

yup, and we still havent addressed this, and it looks like we re simply not going to

ELM327

Q: How do we fix the rental market?
A: Remove HAP, remove rent controls, remove barriers to entry for landlords. Allow rental income to be taxed correctly as corporate profit not PAYE/ other special rules.

Fol20

Smouse156 wrote: »

Despite your idiotic comments what I have suggested is the right thing to do! Houses unsold?? Have you seen the current supply? The whinging could be ignored in a similar way to the large developments that bypass the council.

If you read what I said, I claimed if the state this they would make a decent profit and repay those billions.

But as a delusional landlord like yourself that believes rents haven’t dropped in Dublin over the last year, is clearly someone that hasn’t a clue so no point in talking to you anyway.

How exactly are the state going to make a profit from this because history has long shown that the lose money in this but it helps Ireland from a societal POV. Case in point selling social stock at a massive discount to them, tenants paying virtually nothing and the maintenances costs are very expensive relative to the equivalent private sector.

Fol20

Wanderer78 wrote: »

we have fooled ourselves into thinking requirements will prevent property and land prices from entering strong inflationary periods similar to the past, this is highly unlikely, because virtually nothing has changed in regards the access to credit, current requirements have just locked out a whole cohort of people from accessing these credit markets, yet this availability still actually exists, provided you meet requirements, many entities can meet these requirements, from individuals to major investors and investment groups, nothing has truly changed here

How can you even say the above. We had major property inflation in 08 primarily due to loose access. A teacher borrowing 10-20 times her salary was madness. Are you saying we should go back to that and have another boom and bust in the next recession?

Are you just venting or proposing any solution for the people that don’t meet the requirements? Some people will never afford to own a property and that’s just life. In Ireland we already place too much emphasis on ownership as it is because of you compare to other Eu countries ownership is much less.

Fol20

Wanderer78 wrote: »

yup, and we still havent addressed this, and it looks like we re simply not going to

How would you address it?

Increasing supply is the only way.

How do you increase supply?
-we build too many houses. It’s also currently safer for developers to build houses in phases vs apartments in one large go. Increases taxation around housing and decrease it around apartments so developers are incentivised to build good apartment blocks with 3/4 bed apartments for families.
- planning needs to be fixed to stop stupid complaints blocking a build.
-apartments need to become the norm as house building is inefficient and costly for what it is.

Idbatterim

Fol20 wrote: »

How can you even say the above. We had major property inflation in 08 primarily due to loose access. A teacher borrowing 10-20 times her salary was madness. Are you saying we should go back to that and have another boom and bust in the next recession?

Are you just venting or proposing any solution for the people that don’t meet the requirements? Some people will never afford to own a property and that’s just life. In Ireland we already place too much emphasis on ownership as it is because of you compare to other Eu countries ownership is much less.

Density hugely reduced depriving thousands of homes in the docklands etc, hindering investment, jobs, lot, making a joke of the word " sustainability " because a few people live across the road , same with Irish glass bottle site. It's an absolute scandal ! Cost of current building guidelines is too high for apartments...

ELM327

ELM327 wrote: »

Q: How do we fix the rental market?
A: Remove HAP, remove rent controls, remove barriers to entry for landlords. Allow rental income to be taxed correctly as corporate profit not PAYE/ other special rules.

All this, and normalise evictions and penalties for bad tenants.

TSQ

Biker79 wrote: »

The issues are those caught between being able to save up a deposit and get a mortgage, and those eligible for social housing support.

There seems to be a large gulf between these two cohorts. A sort of no-mans-land where too many people get stuck.

Well it looks like the effective ban on foreign holidays, no mega money spent on 3 day music festivals, no takeaway €3.50 cappuchinos on the way to work or shop-bought lunch, people cooking from scratch at home, going to the park, cycling or walking with the family instead of piling into the car and heading to Blanch to buy unnecessary cr*p etc, have finally forced millenials and post millenials to do what previous generations of would-be home buyers did : cut out the non-essential Stuff and scrimp and save for a few years. Bank savings have shot up and mortgage approvals likewise because people have been forced to save due to covid restrictions. I hope that puts to rest the notion that it is impossible for young people to save a deposit. And before someone jumps on me to say few could have saved the 30k or 40k over nine months, many couples have, and for the others, it just may take a few more years of living the lessons of lockdown.

Eric Cartman

How to fix the rental market in its entirety

1) Allow landlords to decline HAP. It creates a rent floor where landlords intentionally price out HAP tenants to avoid legal cases for taking them. It particularly impacts non Dublin rentals where the prices are artificially inflated to exceed HAP thresholds.

2) Allow full mortgage payments to be written off pre-tax - this prevents the necessity for landlords to basically charge double the mortgage payment in rent for the investment to wash its own face (and before anyone explains about asset value etc.. you know well thats not how it works. Psychologically in Irish small landlords minds it has to wash its face to make sense as an investment. )

3) Escrow services for deposits - Deposits shouldn't be going to landlords bank accounts, it should be in an escrow service where mutual agreement has to be had for its return.

4) 90 Day Evictions enforced by gardai / bailiffs - One of the largest risks to landlords is overlholding of rent or non payment and the impossible nature of evictions. Irish people need to get over this notion that a rental property is 'their home' and that evictions are bad. 14 days late - notice of arrears, 30 days - notice of potential eviction, 60 days - notice that you have 30 days to vacate, 90 days - bailiffs at the door, out on your ear.

5) Low income household rent tax credit - households on under 40k should be allowed a tax credit to effectively pay their rent (up to a reasonable threshold) pre tax. Housing isn't a luxury and keeping lower income households out of the social housing mix is advantageous for government so reward those who work and privately rent by allowing say 1500 a month in rent to come out pre-tax.

brisan

Fol20 wrote: »

How can you even say the above. We had major property inflation in 08 primarily due to loose access. A teacher borrowing 10-20 times her salary was madness. Are you saying we should go back to that and have another boom and bust in the next recession?

Are you just venting or proposing any solution for the people that don’t meet the requirements? Some people will never afford to own a property and that’s just life. In Ireland we already place too much emphasis on ownership as it is because of you compare to other Eu countries ownership is much less.

And the people who cannot afford to buy a house where do they live
In private rentals with exorbitant rents or in non existent social housing