Nowhere to rent

sophfudge · 13-04-2018 12:12pm #1

My tenant is supposed to be moving out and has nowhere to go. But that's not what I want to talk about. I looked on daft and there is one place to rent in the whole area she lives in. It's in Dublin. I've checked a few other areas and it looks to be worse than ever as regards to available property. I think this could be due to all the landlords selling up. I would have kept the property if it wasn't for the tax I had to pay. I wouldn't have been bothered increasing the rent either as I was happy with my tenant. The whole system is a joke!

Samuel T. Cogley · 13-04-2018 2:59pm

Demand is the other side but yes LLs are selling up. Another 13% rise this year so far apparently has me phoning EAs.

Captain Flaps · 13-04-2018 3:00pm

Surely you're not suggesting there's a housing crisis? It can't be! We've been so careful since the crash

Wabbit Ears · 13-04-2018 3:08pm

But... The governments have put in all these safeguards against rent increases and teh like? Its inconcievable that they could be scuppered by wholesale exodus by landlords from the market.

sophfudge · 13-04-2018 3:28pm

How did we learn nothing?! It seems like the government have their heads in the sand

doolox · 13-04-2018 3:37pm

Landlords have been taxed out of the business. Once you have a situation of some equity in the house and are coming near retirement age it is time to bail out. There is no future in doing the governments work for them if you are in advanced years and have a second house. ALL the rental income will go to a nursing home if you need to use one. The situation is to be as poor as possible approaching the age at which your health starts to deteriorate to the point you need a nursing home care place. Also no point in leaving a second house to your kids as the tax free allowances will be soaked up by your first house especially if you have few kids. You may as well spend the money now, which a lot of owners are doing. Inheritance tax of 30% is a major disincentive to holding on to too much wealth for your children.

Many people who were landlords, taxi men , guards, teachers etc are bailing out because the risks are too high for the rewards, heavily taxed as they are.

These jobs, and also the handy cousin or brother who happens to be a builder, are no longer capable of fielding the costs of owning a second house and running a landlord business successfully. The risks and costs are too high.

Maintaining and running a second house has become too expensive and the chance of tenants wrecking a house, especially if not a family, are too high to take the risk.The cost of labour in carrying out repairs has also gone very high as the construction sector is seriously short of workers, they all bailed out in the last recession and are not coming back. Once bitten twice shy.

Future tenants will be dealing with large, impersonal real estate investment funds and agents and will see a scarcity of rental stock as word of mouth will take the place of advertising and houses on the market will be snapped up very quickly if advertised at all.

The government are very reluctant to get into the house building business because they believe it will cause huge social problems and law enforcement costs as well as being very difficult to finance but it is the only way to provide stability in the market place. Most people begrudge social welfare payments but they underpin the wages enjoyed by workers. Workers would be paid a lot less if there was no dole.

Similarly if there was an underpinning stock of social housing available to house people landlords would not be able to charge the rents they are currently charging. The threat of being on the streets is a very real one and a powerful sales point towards paying very high rents.The provision of social housing acts as a very necessary damper to high rents and benefits ALL people, private renters, house buyers etc, not just the social housing tenants in that it weakens the grip that landlords now have on the market.

Graces7 · 13-04-2018 3:38pm

OP I spent most of last year banging my head against that particular brick wall... And checking daft occasionally, it is getting worse. Thankfully I am sorted now but it is a hard place for anyone to find themselves in.

rossmores · 13-04-2018 3:42pm

hearing from other LLs many applicants seeking accommodation are because there existing rental is been sold high taxes was the original bogey then regulations/rent control and with Jan o Sullivan's new bill "acceleration guaranteed" yeah supply heading to zero in Dublin less and less on daft guess longer commutes for many at best
just anti landlord policies helping many decent ones to early retirement.....

awec · 13-04-2018 3:52pm

Landlords selling is not a disaster. The house will either be bought by someone and re-let, or bought by someone to live in which in turn puts another house on the market and so on. There are lots of people living in rental accommodation who want to buy, houses coming on to the market are good news for these folks. Which then in turn frees up their current rental property, and so on and so forth.

People like to blame the current government for the fall in rental properties, reality is the numbers have been going down from before any RPZ policy ever came in to force. The hangover of people from the tiger days being reluctant landlords because of negative equity are coming to an end, and these people are offloading their unwanted property now while they can. This is not, IMO, a terrible thing.

Lumen · 13-04-2018 3:57pm

doolox wrote: »

Landlords have been taxed out of the business.

Is there any statistical evidence of this diminishing rental stock?

An alternative explanation for the lack of available existing rental stock is that tenants are staying put because they can't afford to move.

So the high marginal rents are being paid by new entrants of new stock, and therefore production of new stock is highly incentivised. That new stock is being built by entities that don't pay any tax.

It's a classic piece of free-market fundamentalism which the FG government hs been pursuing for years. Has to work eventually, right? Right...?

Humour Me · 13-04-2018 4:00pm

awec wrote: »

Landlords selling is not a disaster. The house will either be bought by someone and re-let, or bought by someone to live in which in turn puts another house on the market and so on. There are lots of people living in rental accommodation who want to buy, houses coming on to the market are good news for these folks. Which then in turn frees up their current rental property, and so on and so forth.

But that house could have had 4 people living in it, who have had to find new accommodation. If a couple buys the house, only 2 rental spaces at most have been freed up (or none of they were living at home to save for a deposit). At the scale this is happening, housing demand is being squeezed in the buying and rental markets and the lack of housing being built means that many people are being put into very difficult situations.

awec · 13-04-2018 4:09pm

Humour Me wrote: »

But that house could have had 4 people living in it, who have had to find new accommodation. If a couple buys the house, only 2 rental spaces at most have been freed up (or none of they were living at home to save for a deposit). At the scale this is happening, housing demand is being squeezed in the buying and rental markets and the lack of housing being built means that many people are being put into very difficult situations.

Yea but the problem is the lack of housing being built.

If the government cut taxes and scrapped the RPZ do you think we'd see a surge of properties hit the rental market? Where are these properties going to come from?

Housing is a zero sum game. There are a certain number of houses of a liveable standard in Ireland, a certain number of these are rented and a certain number are owner-occupied. Houses move between the two categories, and both categories have more demand than supply can meet. So long as the number of houses remains pretty much the same it's kind of like rearranging the deckchairs on the titanic to be talking about landlords paying tax on their income or rent caps as the potential solution to Ireland's housing problem.

Browney7 · 13-04-2018 4:21pm

doolox wrote: »

Landlords have been taxed out of the business. Once you have a situation of some equity in the house and are coming near retirement age it is time to bail out. There is no future in doing the governments work for them if you are in advanced years and have a second house. ALL the rental income will go to a nursing home if you need to use one. The situation is to be as poor as possible approaching the age at which your health starts to deteriorate to the point you need a nursing home care place. Also no point in leaving a second house to your kids as the tax free allowances will be soaked up by your first house especially if you have few kids. You may as well spend the money now, which a lot of owners are doing. Inheritance tax of 30% is a major disincentive to holding on to too much wealth for your children.

Many people who were landlords, taxi men , guards, teachers etc are bailing out because the risks are too high for the rewards, heavily taxed as they are.

These jobs, and also the handy cousin or brother who happens to be a builder, are no longer capable of fielding the costs of owning a second house and running a landlord business successfully. The risks and costs are too high.

Maintaining and running a second house has become too expensive and the chance of tenants wrecking a house, especially if not a family, are too high to take the risk.The cost of labour in carrying out repairs has also gone very high as the construction sector is seriously short of workers, they all bailed out in the last recession and are not coming back. Once bitten twice shy.

Future tenants will be dealing with large, impersonal real estate investment funds and agents and will see a scarcity of rental stock as word of mouth will take the place of advertising and houses on the market will be snapped up very quickly if advertised at all.

The government are very reluctant to get into the house building business because they believe it will cause huge social problems and law enforcement costs as well as being very difficult to finance but it is the only way to provide stability in the market place. Most people begrudge social welfare payments but they underpin the wages enjoyed by workers. Workers would be paid a lot less if there was no dole.

Similarly if there was an underpinning stock of social housing available to house people landlords would not be able to charge the rents they are currently charging. The threat of being on the streets is a very real one and a powerful sales point towards paying very high rents.The provision of social housing acts as a very necessary damper to high rents and benefits ALL people, private renters, house buyers etc, not just the social housing tenants in that it weakens the grip that landlords now have on the market.

To be honest, I don't think a concentrated leveraged property investment is ever a good idea for someone that has a low to middling amount of wealth - ie your public servant, accountant, teacher on 60k p.a. etc- especially in our "free market" where asset values can go down as well as up? (supposedly). If they have savings built up and like property investment, why not buy shares in a REIT instead?

The same occupations you've listed would struggle to buy a first property near Dublin now let alone countenance purchasing a second - the generational wealth divide in action.

To play devil's advocate (albeit off topic), why should the highly taxed younger worker with low levels of wealth who is paying for high housing costs, pay for the healthcare provision and residential care and the state pension of wealthy (old people with multiple properties) people who will then pass their wealth on to their own children?

DubCount · 13-04-2018 4:26pm

Lumen wrote: »

Is there any statistical evidence of this diminishing rental stock?

An alternative explanation for the lack of available existing rental stock is that tenants are staying put because they can't afford to move.

So the high marginal rents are being paid by new entrants of new stock, and therefore production of new stock is highly incentivised. That new stock is being built by entities that don't pay any tax.

It's a classic piece of free-market fundamentalism which the FG government hs been pursuing for years. Has to work eventually, right? Right...?

The last RTB annual report (2016) showed an increase of just 6,000 in registered tenancies in spite of an additional 30,000 Housing Association tenancies coming within scope for registration. It would be helpful if the RTB was quicker to announce 2017 figures, but I cant see large scale increases in registered tenancies coming through.

Continued rental inflation is indicative of a continuing lack of supply. Whether you want to call that free-market fundamentalism is up to you.

My personal belief is that it is difficult to make the maths work on a rental property investment - especially one financed by a mortgage. High tax and high risk dont help. Whatever efforts are going into increasing housing supply generally, noting is being done to encourage rental supply specifically.

murphaph · 13-04-2018 4:56pm

awec wrote: »

Yea but the problem is the lack of housing being built.

If the government cut taxes and scrapped the RPZ do you think we'd see a surge of properties hit the rental market? Where are these properties going to come from?

Housing is a zero sum game. There are a certain number of houses of a liveable standard in Ireland, a certain number of these are rented and a certain number are owner-occupied. Houses move between the two categories, and both categories have more demand than supply can meet. So long as the number of houses remains pretty much the same it's kind of like rearranging the deckchairs on the titanic to be talking about landlords paying tax on their income or rent caps as the potential solution to Ireland's housing problem.

You're wrong.

Few people will buy a 4 bed house and let the other 3 beds out whereas a large proportion of rentals make use of all the bed spaces.

Fewer rentals mean fewer bed spaces.

Lumen · 13-04-2018 6:24pm

DubCount wrote: »

Continued rental inflation is indicative of a continuing lack of supply. Whether you want to call that free-market fundamentalism is up to you.

The free-market fundamentalism is behind the policy responsible for the lack of supply.

But FWIW I don't find "lack of supply" a particularly compelling phrase. It implies that demand is satiable by some level of supply - if only we built enough (debt financed) housing, we'd somehow fix the problem.

This isn't necessarily true. Demand is elastic and self-reinforcing. Employment creates spending, spending creates employment. People breed.

If you make housing affordable for every worker in a world where most cities have unaffordable housing, people will move here and balance things out. Do we want that? I don't know. It's good for the gene pool at least.

beauf · 16-04-2018 8:37am

I wish people wouldn't quote massive blocks of text.

We have the worst housing crisis in the states history, and in largely unrestricted immigration. We can't house all the new people coming into the country.

We are not building enough to cope with that problem on its own.

I think we have overall in increase in rental properties. But the demand is far more than what exists.

More landlords would leave it if they could. Many are not able to sell up.

_Brian · 16-04-2018 8:45am

The excessive taxation of rental income has collapsed the stock of houses for rent.
Seeing it here in Cavan too, houses that were in rental for decades sold off and not rented. Not just houses from boom time accidental landlords, long term landlords are being fleeced.

If the taxation was eased back to make full time LL an attractive investment the stock of houses would increase over time. As I see it there will be a further steady decline.

Whatever the government are taking in from taxation on rentals it must be paying out ten fold to emergency accommodation for families who can’t find property to rent.
I just think Leo & co are too high brow to actually look into the details and join the dots together to get a whole market picture.

We’re accidental landlords and expect to sell on our property in the year or so.

beauf · 16-04-2018 9:28am

I don't they they are being fleeced. It's just not worth the risks. If the govt put in protection for LL more might stay in it. A lot though are finally out of negative equity, and just don't want the hassle and risk if they are accidental landlords.

Nowhere to rent

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