Rent hikes force students into B&Bs

LANDLORDS were yesterday accused of driving up rents to cushion the blow of rising mortgage interest rates.

As students returned to college after the summer break amid reports of having to sleep in B&Bs because of rent hikes, landlords were warned that running tenants out the door by jumping up costs would only hurt themselves in the long run.

The national housing agency, Threshold, said a high turnover of tenants usually results in properties becoming run down.

The support group claims landlords have hiked up rents in some cases by as much as 20% this year.

Threshold said this was unacceptable, particularly for tenants already renting beyond their means in city centre accommodation.

Threshold chairwoman Aideen Hayden said: “Over the past year, Threshold has noticed a marked increase in the number of tenants presenting with arrears due to the rising cost of rent.

“It seems that landlords are passing on interest rate increases, as well as cushioning themselves against potential further increases, when they are setting their annual rent rates.”

Mortgage interest rate increases are resulting in soaring rents, especially in high-demand areas.

According to Threshold, up to 80% of Irish landlords own one or two properties and therefore, most do not have the capacity to maintain stable rents during a period of increasing rates.

There is around e133 billion in outstanding mortgages on residential property in Ireland.

With several recent European Central Bank (ECB) interest rate hikes, many monthly payments have shot up. For every ECB 0.25% rise, the average payments for a 25-year mortgage have gone up e45 a month.

“In considering a rent increase, landlords should show some restraint and avoid excessive, panic increases,” said Ms Hayden.

Threshold said despite rents nationally going up by 9%, some of their clients, mainly on low incomes, have reported rent increases of up to 20%.

“Tenants who face high rent increases often struggle to meet other costs such as utility bills and the costs of children going to school,” said Ms Hayden. “By driving up rents, landlords may actually be out-of-pocket by losing reliable tenants and incurring the costs of having to advertise their property.”