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A HOUSING CHARITY is worried that landlords will bump up rents before the Government brings in rules against unfair increases.
Threshold want the people to know their rights so they won’t be taken advantage of by landlords ‘frontloading’ increases.
At last weeks Labour party conference, Environment Minister Alan Kelly said he wanted to bring in a system of “rent certainty”.
The details haven’t been confirmed but it’s been suggested that landlords would be prevented from increasing rents beyond the consumer price index unless improvements have been made to a property.
Threshold’s Bob Jordan is warning that landlords may try and get in before this and introduce “retaliatory hikes”:
We are concerned that, in advance of any formal announcement by government, landlords may now move to frontload rent increases. Tenants must be protected from such retaliatory hikes in rent.
The proposals have been been given a cautious welcome by politicians but The Irish Property Owners’ Association warned that less, not more, government intervention is needed.
As well as bringing back bedsits, the IPOA made a number of suggestions they say will help increase supply and fight spiralling prices.
But Threshold are supporting the proposals and want tenants to be educated to guard against pre-emptive increases from landlords.
“If tenants are not made aware of their rights, there is a risk they may face even higher rent increases in unfair circumstances,” says Jordan.
“Threshold will vigorously defend any tenant who faces an unfair rent increase, especially where a landlord is seeking to avoid compliance with the law.”
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At the speed our government reacts – I’d say landlords will get about 10 increases in before anything is done.
Agreed. Why aren’t they proactive instead of reactive?
Jillian because it is just all sound bites to lead up to the next Election.
Ireland ……. a failed society.
Germany rent control (civic code) 1900
Ireland rent control 2015 ….
Landlords max your rent, banks max your debt and Political Parties max your tax … Financial Predators.
Real reform for a successful Irish society badly needed.
More market intervention by the populist but cluless Govt. The current legislation allows for rent to be reviewed once every 12 months in line with market rents. I didn’t see much of a clambour for rent controls when rents fell 30%+ from 2007 to 2011. The latest rent increases in the market have been heavily influenced by Govt policies like the property tax and charging LL’s USC and PRSI on rents in addition to charging tax on rental losses and reducing the mortgage interest allowable against rent to 75%.
Don’t fall for it Paul, this is just the journal flying a kite
In general I agree. Plenty if landlords out there still getting rent not even covering their repayments, so how can you tell them they can’t charge more.
Possibly limiting the increase to something like 5% pa would be reasonable for tenant protection though.
Paul – rents have increased by 50% upwards to astronomical factors since 2008 for some.
You cannot tell us that is to cover additional taxes.
It is pure gouging in a demand-heavy market
Rents fell over 30% between 2007 and 2011. They have been increasing since then and even with a 50% increase since then it still only brings rents back to where they were in 2007.
There is no “right” for rent income to cover interest repayments. As an investor, you need to get a return on investment. With Dublin LL’s getting a 12%+ return p/a on the capital, a shortfall of rent over interest is a cash flow issue, not a loss. They are still making a packet.
If you cannot afford to cover the interest payments, then sell. At least it is not your own residence.
Poor landlords, pah!
Paul – you are right that rents fell after 2008. However, they were too high before then. The fall in rental was a market adjustment back to affordability just like the underlying property value. Prices before then were not affordable, they were funded with credit , rather than earnings.
We are now in yet another bubble. But without access to easy credit, people are suffering instead.
No there is no right for rent to cover repayments, hence my comment in a lot of cases it still fails to do so.
However, unless you’re offering to chip in, I don’t see how you can tell someone they someone they should sell something for less than it costs them, when the market is there for an increase.
Paul, i take it you either don’t rent or are a landlord.
It’s obvious to anyone that we are decades behind all of our neighbour in tenants rights.
If we are going to move to a situation where more people will be renting long term we need a suit of measures to improve housing security and affordability.
Housing should be cheap and freely available, right wing laissez faire principal don’t apply here and only a fool would argue that the do Paul.
Luke I take it you are not a Landlord or Property owner. If you were you would understand the viewpoint of residential landlords and the costs they face providing housing and doing the Govts job for them
And the flip side of that argument is that there is no ‘right’ for tenants to have their rental costs (determined by the market) subsidised by LL’s because of failures by successive Govt’s to provide affordable housing. If you apply your logic (or lack thereof) to any other market there would be uproar. We live in a free market economy after all and not Russia
Should we apply the same principles to provision of health care or public transport. Thankfully most people who know what they are talking about know that these thing as too important to just be left to the market.
I am not advocating rent control but simply security of housing and not a situation where greedy landlords can come in and raise the rent when ever they want. Systems like this work in almost every other country in the EU.
Bottom line is that people who rent have no rights what so ever and it is fast becoming an election issue. Things are going to change in the rental market drastically and sarcastic comments from the likes of you is not going to change that.
I’m sure you’ll be fine though.
Malvolio, your argument is not valid, why should Tenants be expected to pay for the Landlord’s investment? Is this not one of the many reasons of Mortgage default, buying a house and speculating that Rent will cover the repayments?
Luke you seem to be missing the point. There is already legislation that ensures that landlords (greedy or otherwise) cannot increase the rent whenever they want or to a level over and above the market rent. You are advocating rent control and it is worrying that you cannot see what you are arguing yourself! Bottom line is that we live in a free market economy and BS arguments re rent controls or rental market manipulation from you are the likes of that clown Alan Kelly will mot fly or be allowed to come to pass.
@Troll
I think you’re generalising that all landlords are flush & minting it with rent increases.
You’re forgetting about all the property bought in 2000′s that are half-worthless since 2008. Big interest rate increases since, with bigger drops in income.
Thus, about 40% of landlords still don’t cover the mortgage, and cannot simply offload due to massive negative equity.
This was covered on thejournal pretty recently.
Received a letter from our landlord on Friday – rent is increasing by 30% (from €1,200 to €1,550 per month) starting from 1st May. Needless to say we can’t afford it and are now under pressure to find other accommodation. It’s disgraceful that they can command that much money for what is essentially 2 small bedrooms and a boxy sitting room/kitchen.
Aoife, while I do sympathise the fact is your landlord could (depending on your area) easily get the €1,550 pm, if you had say an ounce of gold that you were thinking of selling for €500 you then discover the market for gold is €1000 an ounce wouldn’t you want the €1000?
The landlord can only increase in line with the market. If you think the increase is unfair, lodge an appeal with PRTB and show that other similar properties are getting less rent.
Thomas – the landlord reaction is understandable. The does not mean they should be protected from legislation that curbs their increases. Especially when it means that some people are made homeless by their actions.
Mark – while your advice is good, the board will do nothing if the rent increase is in line with the general rental market. However, the rental market is out of line with the rest of the economy. This makes accommodation unaffordable for a growing number of people.
I’m not saying it’s out of line with other properties, in fact I saw some of the apartments in this complex advertised online for €1,700+ (same size apartment).
What I’m annoyed about is the fact that rents are being allowed to soar and nothing seems to be done about it.
“What I’m annoyed about is the fact that rents are being allowed to soar and nothing seems to be done about it.”
Aoife, I don’t think Fine Gael are going to bring back Eastern Europe style socialism such as lifetime rent controls, in the property sector in Ireland, anytime soon..
if profits are good, and more multinationals are flocking to Dublin ( to avoid onerous corporate taxation) then the cranes will soon feature on the Dublin skyline again; and if the banks are generous, we will go through the same old cycle of boom/bust,all over again.!
@troll
Not a single landlord has made somebody homeless by putting up the rent. You can either afford your rent or not. Landlords are not responsible for social housing that is the government.
If the don’t provide enough accommodation or rent allowance they are letting people down.
If a landlord can get the rent they are meeting market demands. That is what they are meant to do.
Hi Aoife, that’s the rent he could get if the property went on the market now.. But it didn’t.. You live there and he can’t increase the rent to a number he knows you can’t afford.. This is essentially him throwing you out but he can’t do that and if you negotiate that you will pay a fair increase and he says no then you have a case with the PTRB and they have a back log of about six months and he can’t up the rent when in dispute and he can’t throw you out.. That at least gives you another six months to find somewhere or at worst he backs down and agrees to a 7-10% increase which is about market rate.. Fight him on it, he’ll back down and if they don’t take the case..
H Aoife, that’s awful news! Myself my wife and son are lucky our Landlord rents our 2 bed apartment to us for €850 a month, we’re in city west. Been here 8 years. There’s a “but” always a “but” it’s “off the books”. I found her in the buyandsell. Hope you manage to find a place that suits soon.
Marty, your situation is not unique but nevertheless landlords can not usually operate “off the books”
your apartment is probably one of the many ,many bought during the boom and in negative equity.
your landlord is probably somebody who bought it as a starter home, but it no longer suits him to live there, and he cannot attempt to sell it at a loss, as the banks would not tolerate it.
Renting property “off the books” is a dangerous game for the landlord.
If you decide to stop paying rent/destroy the flat, he can’t do squat – as you can just report him to the Revenue! The backpay & fines would be ridiculous.
As Sean says, I’d say your landlord is in a desperate financial state plus a heap of negative equity.
Will the government be telling Dunnes stores how much to charge for bread? Some things should be left to let the market decide, why get involved at all?
Wasn’t there something like that, groceries order?
Yes the grocery order kept prices artificially high for certain items, I’ve no doubt in certain cases the government interfering with private landlords will cause increases in rental cost too. We’ve done perfectly fine up to now without the government sticking their oar in.
Tell that, Thomas, to those who are now homeless – “ah, shur yer doin’ fine!”
Will the government be telling Dunnes stores how much to charge for bread? Some things should be left to let the market decide, why get involved at all?
I agree completely.
If rents are “too high” and profits are good, then builders will build more apartments and investors will buy them.!
There is too much tinkering and regulating going on in areas of private enterprise, where government quangos have no business being set up..
some of these massive quangos (like the massive,”Environmental Protection Agency”) are toothless, and can be ignored by illegal dumpers etc. but the last thing we need is state imposed rent control.
Thomas, Your argument it stupid because having gold is not vital to the social fabric of the state. You’re not being clever
Homelessness has nothing to do with this proposal.
Luke I don’t normally reply to people who’s main argument is ‘your argument is stupid’ as it’s blatant they have no argument at all but I’ll make an exception this once and simplify it for you. If you have an item/commodity/service to sell you try to get the best price you can, landlords are not in business to provide social housing, what the article is talking about is dictating to landlords how much rent they can charge. What if it went the other way? Say the government decide the apartment you rent is not worth €800 a month it should be €1200 per month is it still ok for the government to interfere then?
If this government in the short time it has left want to do something about housing let it be along the lines of community housing rather than interfering in private business
If a restaurant wants to sell food to the public it has to reach minimum standards of hygiene. If a landlord whats to provide a house for rent they must provide minimum standards…. It’s not so crazy to include a clause that a greedy landlord can’t turf you out if you won’t except a price increase.
Thankfully what you and landlords think doesn’t matter and changes are coming.
Luke your restaurant analogy does not even warrant a comment tbh but if the government were suggesting menu price controls how well would that be received do you think? ? Re the rental market if you were even vaguely familiar with the legislation you would know that there are min standards in place in terms of rental accomodate on and would also know that landlords can only increase the rent once per annum and only to a level that is in line with the market rent.
This in principal is a great idea but me thinks its going to be impossible to monitor. Money and profit are why landlords rent property and the demand for rental properties allows them all the control. It’ll be almost impossible to stop unless affordable accomsdation is built and funded by goverment. Demand is the problem not landlords. High rise purpose built units thst are suitable for young professionals and people starting out should be built. Allowing goid regulated income for goverment or maybe a PPP set up.
What exactly do we have social housing for? Why does it remain so exclusive?
After-all, the rents on these guaranteed life-long, fully insulated & kitted out properties many of which are ideally located near places of work, are exceptionally low.
What’s going on that most WORKING people do not even consider putting their names on the list for social housing? Is that not what the whole social housing was brought about, i.e. to help working people get a roof over their heads.
except half the gov ministers are landlords on a grand scale,, making the laws for their own business interests, – CONFLICT OF INTEREST ANYONE?
Really? Which ministers own property on a grand scale? 5 names with the amount if property they have please
I no expert on the rental market or how it works, but I’m actually amazed that the government aren’t doing about it. People who are working and trying to get by are being hit by another price hike. If a single person on their own is being forced to find alternative accommodation due to hikes then it’s a serious problem. The gap between the rich and poor can be seen with these rental rises and what is becoming more clear that the working poor are people in good jobs and with education. I really cannot see how this benefits Ireland at all, people aren’t been given a chance to perform or positively engage in the economy with majority of their cut wages is paying taxes and increases in rent. This will have a long term effect in the social sector as kids having to stay in hotel from and becoming homeless will have extra challenges compared to those who don’t face this dilemmas.
Miriam this Government and previous Governments represent only the Establishment, they do not care about the vast majority of ordinary people in this country. Just look at who owns multiple properties, start with Fat Phil.
These people are not going to legislate against their own…..fat Phil and Dobbie.
Tell the government to keep its hands off private property!! Setting price controls will hurt the rental market.
How will it hurt the Rental Market?
He means it will hurt Landlords pockets.
Property Owners’ Association warned that less, not more, government intervention is needed.
What a totally ridiculous thing to say.
Paul, while rents dropped post-2008 most people’s net incomes dropped as much or more and haven’t increased again in line with rents so while rents may now be just approaching boom levels they constitute a far greater % of the cost of living for people.
You’re right that we live in free market economy which means that any investment incurs a risk. Landlords are not guaranteed profits. As well as living in a free market economy we also live in a society- one where the right of all citizens to shelter shouldn’t be superseded by the greed of a minority.
Lainey investors have no problem with risk however it is up to the market to define it. Introducing Rent controls is market manipulation no matter what way you dress it up. If this and previous got a did their job in terms of housing provision we would even be having this debate.
How about something about the standard of rental accomodation ! Crappy fixtures and furnishings should devalue accomodation but it seems to be just about location !
Damien, the Government need to address the demand for those stuck in the long-term private rental market. On the European market people furnish the accommodation themselves. Here in Ireland the motivation to do anything apart from keeping the house habitable and clean is very limited because of the threat of eviction looms all the time.
The new minimum deposit rules from the central bank constitute a pretty significant manipulation of the market at one end so a counter measure is needed for balance at the other- first time buyers cannot compete with investors many of whom are foreign conglomerates who cite the lack of tenants rights here as an attraction into the market. We’ve seen from the commercial sector how little investors care about the social impact of their decisions so it is important that there are protections in place. By contrast, in other parts of Europe no tenant can be evicted in Winter, (nov-march) whether they are paying their rent or not! I don’t think what Irish renters are looking for is anything beyond fairness.
There is quite a lot of property being built at this moment – hopefully that will effect in more houses being available and prices will start to fall soon again. There is nothing government can do, it’s supply and demand thing and if demand is so high there will always be a way for landlords to bypass the laws.
Greedy Landlords. Their rent should be frozen for 3 years, but sadly this will not happen because they are friends of friends. Wink wink.
I will say again rent should go up once a year and if the cost of living is a half% then the rent should be the same.
Why oh why should make money on the backs of couples or students who can’t afford to buy.
Mr Kelly take note.
As the government are about as slow as a sloth at full speed they will have to apply retrospective legislation and rules allowing the prtb to intervene where a landlord since the 1st of jan 2015 has hiked a rent up past the CPI or inflation
have your say