Rental market is 'dysfunctional', say property owners 

The 'dysfunctional' market is encouraging small landlords to leave the sector, and sell their property. Picture: Denis Scannell

There have been too many legislative changes in the “dysfunctional” private rental sector since 2009, an Oireachtas committee has been told.

Information officer for the Irish Property Owners Association, Margaret McCormick, told the Joint Committee on Housing, Local Government, and Heritage that there have been 88 statutory instruments and 21 changes to Acts since 2009, relating to the private rental sector.

She said it is now six years since rent pressure zones were introduced, adding that the level of indebtedness of landlords in those areas is not taken into account. 

Rents in such zones cannot be increased by more than general inflation, or by 2%, if inflation is higher.

Ms McCormick described the current rental market as “dysfunctional”. She said: "There is nothing there to keep a landlord in the market and we need to keep property owners in the market."

Anne Marie O’Reilly of housing charity Threshold told the committee that rent regulation should only ever be a temporary measure, while long-term solutions are put in place.

She said: “We are now six years into rent pressure zones. We should be further along in delivering affordable housing — social, cost rental and so on, but unfortunately, there may need to be another consideration given to how the RPZs are designated.”

During the hearing, chief executive of the Institute of Property Auctioneers and Valuers, Pat Davitt, said there are currently no figures available for how many landlords are leaving the market.

He also highlighted concerns about rent pressure zones which are being raised by letting agents.

He told committee members of the experience of one letting agent in Cork, who wrote in recent days: "Feeling sad today. Given notice of termination to a lovely tenant and family. The landlord’s mortgage repayments are up €300 per month (1.25%). Rent can only be increased by €25 as the property is in a rent pressure zone. The rent for this home is at 60% below the open market, or the market value of property in the area. 60%.

"And the tenant would gladly pay more money for this property and will be paying more in their next property, but landlords and tenants are losing out due to the rental regulations in the RPZs that are not working. 

"Rent pressure zones are many years in operation and are only making the rental market more dysfunctional. When are we going to cop on and admit that this experiment is not working?” 

Substandard living 

Sinn Fein TD Thomas Gould raised concerns about figures provided by Cork City Council to city council member Eolan Ryng, which showed that more than 90% of Housing Assistance Payment properties inspected on behalf of Cork City Council since the end of 2021 failed to meet required standards.

He described the figure as “phenomenal”.

Anne Marie O’Reilly said it is problem, and Threshold would like to see a situation where a landlord has to prove that a property is up to standard before letting it out.

Michael Byrne from the school of social policy, social work and social justice at UCD told the committee that even if ongoing attempts to increase housing supply are successful, “it is simply not possible to protect tenants today, this year, or indeed within the next few years via the mechanism of supply.”