RPZ changes

Ray Palmer · 12-02-2025 10:38AM #1

It appears that Mr Martin has upset a lot of people by suggesting RPZ would need to change. This seems to be a bad misstep politically as people have panicked without having any information.

I personally believe the RPZ was badly applied and has bad aspects to it but see some control should apply. It seems to me that it really helped the government with figures and introduced an inequality between certain renters and certain landlords. It has stifled investment in to property and punished landlords that didn't raise rents on tenants.

What I would like to see changed

Replace the 2% cap and link it to ECB rate and/or inflation

Remove the retention of rent rate to a new tenant

27cyrix · 12-02-2025 12:47PM

Not sure what they are head to, but from the news, its likely to be what you said, higher increase % and remove cap for new tenant.

I few RPZ is the best way to inflated rent and property price.

spaceHopper · 12-02-2025 01:49PM

State / councils own and rent social housing and get rid of HAP. Keep rent allowance so if you lose your job, you are OK but if you don't get new one you move to a council provided house or flat. Basically, get the state out of private rental accommodation.

That will free up property and make it more available to renters. HAP distorts the price. It probably won't lower prices, but it would stop or reduce inflation so over time as wages rise the burden becomes less.

Deal with problem tenants and problem landlords quickly - not of this two year crack if somebody stops paying and standards have to rise. Pay your tax. The RTB need to be reformed - they are a pure nightmare to deal with

nellica · 12-02-2025 02:34PM

RPZs not working for me, honest and reasonable Landlords being unfairly treated, I was only allowed increase rent by one euro last time so its now way below market for the area

Claw Hammer · 12-02-2025 04:22PM

The biggest single disincentive to landlords investing is the inability to deal with delinquent tenants. A tenant who does not pay up on time should be in court within weeks and out straight away if they are found in breach.
Landlords can put up with capped rent and a bit of damage but having the tenant from hell who won't pay and won't leave is keeping investors out of the market.

There are billions of euro held by Irish people on bank deposit. These sums earn low rates of interest.
That is where the money to tackle the housing problem should come from, not from mobile foreign companies.

Ray Palmer · 12-02-2025 04:56PM

https://www.boards.ie/discussion/comment/123162840#Comment_123162840

Seems unlike

1/2=0.5 would be 1% of the total rent

Therefore the rent you were charging was (0.5*100) 50euro

DubCount · 12-02-2025 07:52PM

Rent controls have predictable consequences - under supply of rental accommodation, poor quality supply (who would increase quality when you cant charge more for it), people finding "work arounds" with under the counter payments etc..

RPZs have been especially damaging. When you restrict prices to different levels for similar properties, the cheaper properties are most likely to leave the market first. Thats what has happened in Ireland.

RPZs sound like they protect tenants. In effect, they damage tenants interest. I believe most tenants would have cheaper, better quality homes without them.

Fol20 · 12-02-2025 11:58PM

I beg to differ on difficult tenants being the biggest issue now. At least with a difficult tenant, once they’re out, 99pc of other tenants will be fine and you’ll be able to charge a normal rate.

With the current Rpz . Youre basically guaranteeing that over time. Your rental income will drop year in year out and you will make less money and make the investment less sustainable with inflation and all the costs also going up. There is no end in sight while a tricky tenant will make your life miserable for two years and then it’s back to normal again

nellica · 13-02-2025 12:06AM

Ray,

It was one euro per month I was allowed to raise it, perhaps I should query it?

Fol20 · 13-02-2025 12:12AM

The problem we have now though is that if we leave the system as is. Supply will continue to go down further for private and rents will go up(but more importantly. There is no light at the end of the tunnel until the government final accept that Rpz is a failure) As an example, Sherry Fitzgerald reported that in 2024, 33pc of their transactions were ll selling up while 11pc of their transactions were investors buying. If we equate this to the total market. We had 38k transactions across Ireland. this equates to 12500 ll selling up with only about 4200 entering or a net drop of over 8,000 rentals in a single year. How is this sustainable for the rental sector?? Some people say it’s great that the greedy landlords are selling up as now another person can own their own home but where will all the renters go if they have less options.

If they remove Rpz. Rents are guaranteed to go up in the short term as a temporary measure that was only meant to be implemented for 2 years has been left to boil over for 9 years. In the long run though in a normal functioning market, will attract new investment and more competition will naturally cause rent prices to settle.

Both options mean rents will go up but at least if we had more rental supply and competition, rents should naturally come down with time.

I hope to god though they don’t use the reference rent model as this has proven to be a failure in Germany. What tends to happen is that when a tenant leaves in Germany in an area with these reference rents, the ll just sells up.

The only way to solve this is to unfortunately, let the band aid off and in 5 years time. Instead of the market shrinking by 30pc. From 300k to 200k. It will hopefully rebound to having 250k rentals.

Ray Palmer · 13-02-2025 12:37PM

https://www.boards.ie/discussion/comment/123165422#Comment_123165422

Who told you it was only one euro? It is 2% at least and depending on the last raise it could be more. By only putting it up by a small amount you may have snookered yourself

Ray Palmer · 13-02-2025 01:09PM

https://www.boards.ie/discussion/comment/123165453#Comment_123165453

I think from the governments point of view RPZ has worked well. They got figures to show rent was not going up as fast,reduced HAP payments going up and the public liked it.

Fol20 · 13-02-2025 01:56PM

https://www.boards.ie/discussion/comment/123166837#Comment_123166837

I think your right on some fronts but its hard to argue that 100k less rentals in the market over 9 years is anything but bad. Im just surprised that the media dont report this and somehow report that rentals have gone up when in reality good investigative journalism would point toward steady continued declines vs looking at a very small snippet. Populist policies are not always good policies either.

Polysee made a great video on the topic before:

https://www.youtube.com/watch?v=bJrpU6DK0HI&ab_channel=Polysee

The Student · 13-02-2025 02:36PM

https://www.boards.ie/discussion/2058396056/rpz-changes

What if you have a low rent and the tenant is happy to stay put. How is it fair on the landlord compared to other landlords where the tenant chooses to leave themselves? Why not treat all landlords equally and let the market decide.

Why are the good landlords punished again! I know I have two properties both well below market rate for the respective areas with neither tenant one on RAS and the other on HAP never planning to move by choice. So I fall further behind on future rents.

Ray Palmer · 13-02-2025 04:16PM

https://www.boards.ie/discussion/comment/123167235#Comment_123167235

I completely agree but once RPZ was brought in securing tenancy as a goal was expanded to lock people in low rent for future tenancies which I think was the biggest mistake. I believe it was done specifically to aid in government figures and keep the public happy. They knew it would affect landlords and didn't care that it would reduce lettings as it would take time and the public wouldn't really notice. It looks like it was very successful once you realise it was not to increase rental property

The Student · 13-02-2025 04:23PM

https://www.boards.ie/discussion/comment/123167707#Comment_123167707

If as has been mentioned that a large % of private tenants are availing of HAP/RAS etc and the govt discriminate against those landlords on well below market rent then its only logical to expect a reaction.

Claw Hammer · 13-02-2025 04:41PM

https://www.boards.ie/discussion/comment/123165384#Comment_123165384

Getting a difficult tenant out can take years and the landlord may have lost the property by that time as they still have to pay the mortgage. That is what stops people investing. Saying 99% of tenants are alright is nonsense. If you have one property and you get a bad tenant it is 100% of your tenants who are bad.

Ray Palmer · 13-02-2025 05:22PM

https://www.boards.ie/discussion/comment/123167733#Comment_123167733

Yes I completely agree and it happened. The government knew this too and didn't care as it was a popular move and knew it would take time before the public would notice. I can guarantee you the majority loved that landlords suffered and would like us all to suffer more. You can look back and see people delighted landlords sold up because of RPZ and think it was a good idea as now there was more property to buy.

The video posted does a very good job of explaining it all

Fol20 · 13-02-2025 05:29PM

https://www.boards.ie/discussion/comment/123167804#Comment_123167804

Your 100pc right that it is a major risk and would cause great emotional and financial strain if you have a tenant like the above. If you have a single property and this happens you will more than likely get out. I just dont think from a macro level, it isnt the biggest factor. The tenant side risk has always been there and although it should be fixed, the biggest factor is still rpz in my eyes. You could have some setups where the tenant has been perfect and living in your rental for 10 years and no issues however due to costs and mortgages spiking over the past few years, it has made it an unsustainable investment.

Likewise 99pc of tenants and landords are fine. I just meant whomever gets the difficult tenant is unlucky as 99 out of 100 tenants that you can pick from will be fine.

In a normal functioning market, risk is also costed as part of the return.

nellica · 13-02-2025 05:47PM

Ray thanks for reply, below is part of what I got from RTB when doing Rent Review, they said its to do with inflation, I didn't accept the one euro rise but will wait a bit and review again while keeping an eye on inflation, do you think that is a good idea?

"The cap of 2% per annum pro rata will result in lower rent increases in RPZs during times of high inflation. The calculator may indicate that no rent increase is allowed. There is no legal requirement on a landlord to increase the current rent amount. There is no legal obstacle to a landlord reducing the current rent amount."

Ray Palmer · 13-02-2025 05:51PM

https://www.boards.ie/discussion/comment/123168026#Comment_123168026

RTB agent was wrong. Go look up the calculator online and put in your figures. It will tell you. Don't wait because you don't know what they will bring in and it will take time before any change actually happens. They could and will if they can to do anything to stop rents increasing on an existing tenant. Do what you can now legally

nellica · 16-02-2025 10:23AM

Thanks Ray, I will try that

RPZ changes

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