Rent freeze?

pwurple · 11-12-2019 10:11am

godtabh wrote: »

Surely that isn’t a serious question? The hassle of a residential vs a commercial rental makes that an easy choice surely?

If I wAsnt in ne I’d be gone. As it stands I’m considering selling up at a big lose not to have to deal with the hassle but would feel for existing tenants. At what I am Charing they will struggle to afford the makers rent

Yes when I put it like that... I'd be mad to keep them, right?

I've been doing this for 20+ years, so I've seen economy ups and downs. It's not as easy to fill commercial in a downturn. We're at peak employment now and office space is in demand. It's not always like that. The leases are longer, usually 5 to 10 years, but I've had vacant units in commercial over the years. Yes, it's certainly FAR less hassle. No 2am calls about a domestic for example.

Some of my tenants have been there 8 years, some 4 etc. We have a good relationship. It is their home and I don't want them to be fecked out on their ear either. (the going rate would would see them paying nearly double the rent I am charging). There is certainly a human aspect.

This is why I cannot understand why the govt would even consider this proposal which encourages housing suppliers to shut units.

The Student · 11-12-2019 11:00am

smurgen wrote: »

Nope.i hate the idea of our government Paying long term over inflated rents to a foreign investment fund and in the example of the development in Herbert Hill. I would love to get an explanation of how they thought that was a good idea.
But the advantages of a REIT is if it was to fail we wouldn't have to bail them out. I favour this over our own citizens investing in a potentially risky market. The problem is so many individuals in this country are invested in real estate that it's hard to get things done in a way that is beneficial for everyone. Any move at moderation is seen as an existential threat.

The Govt is constrained in increasing our public debt with the IMF/Europe so they can't take any loans that increase the public debt. This is the reason they are giving preferential tax breaks to REITS etc.

This is money that does not affect banks liquidity or their requirements with the ECB.

The risk of the above approach is that individual landlords are a group of individuals who take the market price. Whereas REITS can set the market price, and whether people like it or not we need them.

What the Govt is doing is forcing by their actions the small landlords out of the market. And before you say but the property does not disappear you are correct it does not disappear but the number of bed spaces available to rent does.

If the Govt continue on their course they will have a small number of REITS controlling the majority of the market and they will then dictate housing policy to the Govt.

There is a place for all types of landlord in the market but if you give control to one over the others they will dictate future policy.

On a seperate note we need to revisit our eviction laws, if you are not paying your mortgage, rent (be it private or social) then there should be consequences. Try find a Politician to enforce any laws that deal with this.

Sleepy · 11-12-2019 1:20pm

We really need to make economics a mandatory subject in school so future generations won't be as susceptible the populist bull**** like this that Sinn Fein love to shout from the opposition benches safe in the knowledge they'll never have to actually enact any of it.

ELM327 · 11-12-2019 1:22pm

Sleepy wrote: »

We really need to make economics a mandatory subject in school so future generations won't be as susceptible the populist bull**** like this that Sinn Fein love to shout from the opposition benches safe in the knowledge they'll never have to actually enact any of it.

+1
Or just move to FPTP voting, remove all the populist minority parties that are over represented

The Student · 11-12-2019 2:41pm

Old diesel wrote: »

The market at the moment seems to be signalling that it requires more rent even with some insane rents.

There has to be a point where you say ENOUGH and that there just isn't the money there to make people happy.

Personally I think the market needs a player to come in with the specific intention of delivering cost effective housing. The reason air travel to London is relatively cheap is because Michael O Leary made a deliberate decision to step up and reduce air travel costs. Cheaper fares.

This might even mean a state solution like opening up social housing eligibility to higher incomes.

That means higher incomes coming into a version of HAP.

Housing to my mind as it stands is a money pit.

Being a landlord is a business pure and simple. It never ceases to amaze me how people just don't get that concept.

ELM327 · 11-12-2019 2:43pm

The Student wrote: »

Being a landlord is a business pure and simple. It never ceases to amaze me how people just don't get that concept.

See, people assume if you're a landlord then you are rich and evil
Despite the fact that you're probably leveraged to buy the properties and paying 50% tax on the rental income

Colonel Claptrap · 11-12-2019 2:46pm

€53m wiped off the market value of IRES overnight.

Other industry sources saying investment decisions are now on hold until a new Dail provides clarity.

Take a bow Sinn Fein.

Moomoomacshoe · 11-12-2019 2:53pm

The Student wrote: »

Being a landlord is a business pure and simple. It never ceases to amaze me how people just don't get that concept.

Hmmm a business when it suits them. For crying out loud the amount of cases with PRTB should tell you otherwise!! It's so bad the PRTB have set up an investigations unit as so many landlords illegally hiking rents and terminating notice etc etc.

Would love to see some competition as previous poster suggested!

is_that_so · 11-12-2019 3:01pm

Del2005 wrote: »

Most likely never. Plenty of legislation has been passed but the government has blocked them by not authorising the money aspect.

For all the people saying that this is a good thing can you provide evidence of a place where rent freezes did any good? There's been plenty of rent freezes.

It also has to be done in Private Members' time , which will extend the time required. Someone made the point earlier that it will just run out of time and not get through all stages before this Dail ends. That's also a fair possibility, especially if people want to get an election before March.

The Student · 11-12-2019 3:01pm

Moomoomacshoe wrote: »

Hmmm a business when it suits them. For crying out loud the amount of cases with PRTB should tell you otherwise!! It's so bad the PRTB have set up an investigations unit as so many landlords illegally hiking rents and terminating notice etc etc.

Would love to see some competition as previous poster suggested!

All business's have rules to follow and when they don't they are punished. How many cases don't even get to the RTB for overholding tenants were landlords pay the tenant off rather than go to the RTB?

Before you say the landlords should go to the RTB what exactly is the benefit of doing so? You might get a judgement for outstanding rent and never see a penny of it.

Why would anybody enter a market where rents are frozen, evictions are nigh on impossible, extra costs are proposed on landlords to increase energy effeciency without getting any extra income.

Seriously people wonder why we are where we are!

As I said being a landlord is a business where you try to make the highest return you can on your investment.

Old diesel · 11-12-2019 3:45pm

The Student wrote: »

Being a landlord is a business pure and simple. It never ceases to amaze me how people just don't get that concept.

Yes and unfortunately the money that business appears to need to keep it attractive is an unsustainable sum of money.

Rents need to go down - but landlords need it to keep going up.

There's rather an irreconcilable conflict between both of those conflicting facts.

Housing does require something different.

That's why I mentioned Michael O Leary as an example.

If I was to take the landlord model and apply it to planes then the way forward would have been keep paying more to Aer Lingus each year to fly to London.

Because we hope that if we pay Aer Lingus enough for the seat they might put more planes on the London route and thus bring prices down.

In reality what Aer Lingus needed to bring prices down was someone making a deliberate decision to bring prices down. That someone being Michael O Leary.

In the 80s a cheap trip to London meant an overnight trip by coach and Ferry.

You'd be looking at 5.30 pm out of Cork bus Station and arriving at Victoria Station in London at something like 7 or 8 in the morning.

Now you book a Ryanair.

I don't even know who even gets a coach to London anymore. You can still do it but flights are so dear now.

No I'm sorry but housing needs a strategy where someone arrives in at the lowest rent they can while still having a margin.

Think it will take some kind of housing association type model. Or a Government bond scheme for housing.

The latter would work by people putting money into a bond and the Govt pays them a guaranteed return in a specified time frame.

Anyone could put in a sum of money - small sums - big sums. Put in money as a once off or continuously as long term savings.

The Govt uses the money to develop affordable rental housing and pays a return to the people who put up the money.

A tenant could invest and win on the double - get a return on money invested AND enjoy more sustainable rent.

This current model of housing works for NO ONE so why keep throwing money at it without a plan to turn it around.

Fol20 · 11-12-2019 3:57pm

Old diesel wrote: »

Yes and unfortunately the money that business appears to need to keep it attractive is an unsustainable sum of money.

Rents need to go down - but landlords need it to keep going up.

There's rather an irreconcilable conflict between both of those conflicting facts.

Housing does require something different.

That's why I mentioned Michael O Leary as an example.

If I was to take the landlord model and apply it to planes then the way forward would have been keep paying more to Aer Lingus each year to fly to London.

Because we hope that if we pay Aer Lingus enough for the seat they might put more planes on the London route and thus bring prices down.

In reality what Aer Lingus needed to bring prices down was someone making a deliberate decision to bring prices down. That someone being Michael O Leary.

In the 80s a cheap trip to London meant an overnight trip by coach and Ferry.

You'd be looking at 5.30 pm out of Cork bus Station and arriving at Victoria Station in London at something like 7 or 8 in the morning.

Now you book a Ryanair.

I don't even know who even gets a coach to London anymore. You can still do it but flights are so dear now.

No I'm sorry but housing needs a strategy where someone arrives in at the lowest rent they can while still having a margin.

Think it will take some kind of housing association type model. Or a Government bond scheme for housing.

The latter would work by people putting money into a bond and the Govt pays them a guaranteed return in a specified time frame.

Anyone could put in a sum of money - small sums - big sums. Put in money as a once off or continuously as long term savings.

The Govt uses the money to develop affordable rental housing and pays a return to the people who put up the money.

A tenant could invest and win on the double - get a return on money invested AND enjoy more sustainable rent.

This current model of housing works for NO ONE so why keep throwing money at it without a plan to turn it around.

I see your point but the the issue with that example is that the government do not interfere with the model as much as what they do in Ireland. It’s something most would like to see but you have to ask yourself why would a company be a disrupted in Ireland’s market when we are such a small nation, government legislation. Major capital upfront investment how will they make it cheaper.

I think someone else already mentioned that the government may not be able to create a semi state body due to Eu rules.

I’d be ok with the government to create bonds to start this business if it was allowed as it would be a good idea. The issue here though is hap and social housing does not have a good record for repayments so how can you force a tenant with very little money to pay up what they owe. This is something that needs to be fixed but again is political suicide If they resolved a long term issue plaguing housing.

Graham · 11-12-2019 3:58pm

Old diesel wrote: »

In reality what Aer Lingus needed to bring prices down was someone making a deliberate decision to bring prices down. That someone being Michael O Leary.

I'd argue the largest factor in bringing down ticket prices was the removal of government intervention and subsidies and the opening of the market to true competition.

While I don't disagree with your point that rents can't continue upwards forever, the fix to this is in addressing the major underlying cost (property prices) and reducing risk (reasonable processes for eviction for non-paying tenants).

Old diesel · 11-12-2019 4:01pm

Colonel Claptrap wrote: »

€53m wiped off the market value of IRES overnight.

Other industry sources saying investment decisions are now on hold until a new Dail provides clarity.

Take a bow Sinn Fein.

I would see this as evidence that even at really stupid rents the market expectation is for long term increases with no intention to ever deliver lower rents.

The investment is on hold because - part of the anticipated profit return is coming from more rent increases.

So you enter the market at 3 k for example and you plan to always go higher.

You don't ever intend to come down to a lower figure.

If you did have a genuine intention to deliver a lower rent then current values then you'd actually plan that investment on that basis - to be profitable at a lower rate.

In which case a rent frozen at a higher level to the one you expect to deliver at isn't a barrier to entry.

The market is sending a signal of intent when a rent freeze at an already stupidly high level takes 53 million off shares.

I welcome the signal of intent as it shows us the markets true intent.

Let's be clear - im not blaming landlords for their business model being too expensive.

But it's still too expensive if it's at the price level apparently needed to make staying in the business or getting into it too expensive.

Graham · 11-12-2019 4:04pm

Suggestion of more market interference, market retreats.

Hands up if this came as a surprise to anyone?

Old diesel · 11-12-2019 4:19pm

Fol20 wrote: »

I see your point but the the issue with that example is that the government do not interfere with the model as much as what they do in Ireland. It’s something most would like to see but you have to ask yourself why would a company be a disrupted in Ireland’s market when we are such a small nation, government legislation. Major capital upfront investment how will they make it cheaper.

I think someone else already mentioned that the government may not be able to create a semi state body due to Eu rules.

I’d be ok with the government to create bonds to start this business if it was allowed as it would be a good idea. The issue here though is hap and social housing does not have a good record for repayments so how can you force a tenant with very little money to pay up what they owe. This is something that needs to be fixed but again is political suicide If they resolved a long term issue plaguing housing.

My big worry is that if you just keep unlimited rent increases then tenants will end up running out of money.

Or face a "well the only place I can afford to live is somewhere in Rural Clare but I'm a nurse in Dublin" type scenario.

At 2 k a month minimum a Tenant over a working life of 40 years will end up 960 k.

The problem is their ability to pay is going to have restrictions.

Vienna is in EU yet seems to have fairly relaxed social housing set ups.

Relaxed as in - people who in Ireland earn too much for social housing or subsidised housing can access it in Vienna.

Housing is just a mess in this country.

I'm afraid I can't get past the idea that just putting more and more rent into it won't get us there on its own.

All I see with continuous unlimited rent increases is Tenants with no money eventually.

Cyclepath · 11-12-2019 4:46pm

Landlords aren't a single amorphous blob. there are many kinds. The large REITs can carry debt over a long number of years and pay much less tax than individual private landlords.

Most landlords I know are not 'in business'. They are feverishly trying to hold onto an asset that is worth less than they paid for it by renting it to tenants that help to pay off the mortgage. The ultimate goal is to end up with an asset after 25 to 30 years.

While doing so, they are taxed over 50% on the supposed 'profit' and therefore end up at a loss. You only make a profit if you've inherited a house mortgage free. I got out a few years ago when the maths simply didn't stack up any more. I had a net less than zero return for 13 years of pure misery dealing with tenants that treated my property like an adventure park.

Tbh, I'm sick of listening to bullsh1tology from people that clearly know nothing about the realities of renting property. I'm also sick of hearing how private individuals with millstone 'assets' should somehow take responsibility for the government's inept approach to social housing and their inability to create and regulate a marketplace that encourages builders to meet the demand.

AlmightyCushion · 11-12-2019 4:53pm

Colonel Claptrap wrote: »

€53m wiped off the market value of IRES overnight.

Other industry sources saying investment decisions are now on hold until a new Dail provides clarity.

Take a bow Sinn Fein.

IRES share price is currently only slightly below where it was at just a month ago. Not exactly cataclysmic now is it.

The Student · 11-12-2019 5:01pm

Old diesel wrote: »

My big worry is that if you just keep unlimited rent increases then tenants will end up running out of money.

Or face a "well the only place I can afford to live is somewhere in Rural Clare but I'm a nurse in Dublin" type scenario.

At 2 k a month minimum a Tenant over a working life of 40 years will end up 960 k.

The problem is their ability to pay is going to have restrictions.

Vienna is in EU yet seems to have fairly relaxed social housing set ups.

Relaxed as in - people who in Ireland earn too much for social housing or subsidised housing can access it in Vienna.

Housing is just a mess in this country.

I'm afraid I can't get past the idea that just putting more and more rent into it won't get us there on its own.

All I see with continuous unlimited rent increases is Tenants with no money eventually.

The problem is that the market is not getting a chance to find its equilibrium, in a normal market no matter what market it is when supernormal profits are earned new competition enters the market until just normal profit is earned.

So look at the current market, investors be they individuals or corporate wont invest if there is a rent freeze (ie they are hindered from maximising profits normal business objectives).

So the Govt with its policies are scaring off new investors at a time when we need increased supply.

The govt wont build social housing as (a) our national debt can rise due to IMF rules, (b) Approved housing bodies were seperate to the state so are not on the states balance sheet although the IMF said they are and (c) no politician will advocate evictions under any circumstances.

So what we have here is when you need to increase supply the govt puts a rent freeze so no new investment by private landlords as they are not maximising their investment. Prime objective of every private business.

The state can't increase its borrowing as it would exceed the limits of the IMF and our bailout. So it expects the private rented sector to deal with non paying tenants, maintence of the property, takes the lion share of the rental income for no risk at all.

Eventually rents will reach a point that people cant afford and they will drop to those levels that people can afford but it is up to the market to decide this not the Govt. If the Govt want to reduce rents then they need to encourage investment or build themselves.

Vienna is culturally different to Ireland so I don't think we are comparing like with like. It is almost a national obsession in Ireland if you can beat the system.

Iscreamkone · 11-12-2019 5:15pm

Rent freeze = Black economy charter
Is this what we want?

Fol20 · 11-12-2019 5:19pm

Old diesel wrote: »

My big worry is that if you just keep unlimited rent increases then tenants will end up running out of money.

Or face a "well the only place I can afford to live is somewhere in Rural Clare but I'm a nurse in Dublin" type scenario.

At 2 k a month minimum a Tenant over a working life of 40 years will end up 960 k.

The problem is their ability to pay is going to have restrictions.

Vienna is in EU yet seems to have fairly relaxed social housing set ups.

Relaxed as in - people who in Ireland earn too much for social housing or subsidised housing can access it in Vienna.

Housing is just a mess in this country.

I'm afraid I can't get past the idea that just putting more and more rent into it won't get us there on its own.

All I see with continuous unlimited rent increases is Tenants with no money eventually.

As you said tenants can only afford so much so there will be a natural limit once market allows it. We are already starting to see this in the purchase market and the 3.5x rule. If we allow a complete free market with no interference, i think we will have short term pain however long term, it would fix the issue much quicker. In any free market, if there are super profits to be made, more will join the market which will bring down profits for existing stakeholders. Right now, the government is stopping this with their interference and continual band aids they put on it.

Vienna has legacy systems in place which might be the main reason.

handlemaster · 11-12-2019 6:32pm

https://m.independent.ie/breaking-news/irish-news/mcdonald-wont-commit-to-charity-donation-after-revelations-about-4-7m-english-political-donor-38775498.html

Looks like the SF donations won't be coming for the homeless.

Mad_maxx · 11-12-2019 6:45pm

How long will it likely take before this turd ( bill) is enacted?

Old diesel · 11-12-2019 8:20pm

Mad_maxx wrote: »

How long will it likely take before this turd ( bill) is enacted?

Because of the tax rebate bit - the Govt can actually stop it via money message.

So may not go through at all in its present form.

Fianna Fail also making noise about scrutinising the bill further in later stages.

The Fianna Fail quote I saw was about "not penalising landlords who don't hike up the rent".

So further amendments possible.

Graham · 11-12-2019 8:32pm

Isn't this a private members bill?

Chances of it actually making it to legislation are about the same as Santy delivering everything on my Christmas list.

Yellow_Fern · 11-12-2019 9:56pm

mikemac2 wrote: »

For that example one more year paid off your asset and since its break even you don't put your hand in your pocket and yet you paint it as all negative ?

Why do landlords exclude this point? Unless the house is shoddy timber and will fall down in 20 years it's very relevant

Many landlords own their property outright. I saw a figure that perhaps only 40% were mortgaged.

Graham · 11-12-2019 10:04pm

I'd be interested in looking at the source of that 40% figure Yellow Fern.

boege · 11-12-2019 11:32pm

Graham wrote: »

I'd be interested in looking at the source of that 40% figure Yellow Fern.

Its actually 61% in 2018. The article suggests that those without mortgages fare better in terms of ROI. This would explain the number of cash buyers in the market over the past number of years. It also possibly explains why (non-cash) investment buyers have largely disappeared.
https://www.irishtimes.com/business/personal-finance/why-are-landlords-leaving-the-market-in-large-numbers-1.3360363

'Sixty-one per cent of all rented property, or almost 200,000 properties, are now owned outright by investors, according to Savills.'

Graham · 11-12-2019 11:35pm

I wonder if that 61% includes the propertied owned by REITs.

AlmightyCushion · 11-12-2019 11:42pm

boege wrote: »

Its actually 61% in 2018. The article suggests that those without mortgages fare better in terms of ROI. This would explain the number of cash buyers in the market over the past number of years. It also possibly explains why (non-cash) investment buyers have largely disappeared.
https://www.irishtimes.com/business/personal-finance/why-are-landlords-leaving-the-market-in-large-numbers-1.3360363

'Sixty-one per cent of all rented property, or almost 200,000 properties, are now owned outright by investors, according to Savills.'

I'd be surprised if landlords without mortgages didn't fare better. They don't have the expense of interest payments.

Rent freeze?

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