Vulture funds 'best landlords', says tenancies board chief
'The greatest security of tenure you get now is from institutional landlords,' said Tom Dunne, chair of the Residential Tenancies Board.
The best place for households renting in the private market to live is in a property owned by a vulture fund, the chair of the Residential Tenancies Board has said.
In remarks made at the launch of a report into how the private rental sector is making people more vulnerable, Tom Dunne said it is “worth a tenant’s while to pay more rent to achieve security of tenure”.
“The greatest security of tenure you get now is from institutional landlords,” he said, adding there was “enormous resistance in our society” to institutional landlords, which he has “always been curious about”.
Mr Dunne said that, unlike private landlords, vulture funds cannot evict tenants in order to move a family member in and are less likely to sell up if they have invested in a property. On the other hand, there are increasing reports of smaller landlords leaving the sector and further reducing the supply of available housing.
He added that renting from such funds provides “security of tenure, provided you can meet the rent”.
Mr Dunne said proposals being considered by Government to ban evictions this winter may lead some landlords to choose not to rent out their property in future, which would further lessen supply in the market.
“Tax and other incentives might not overcome this reluctance [from landlords],” he said, adding that it was important that if the Government was going to introduce incentives to encourage landlords to remain in the market, it must not create a situation that would allow landlords to then outbid first-time buyers.
He said that one change made to try to improve the situation in the housing market could have unintended negative consequences in another area of the market, comparing it to “whack a mole”.
“That problem will pop up again then, somewhere else,” Mr Dunne said.
His remarks came at the launch of a report published by housing charity Threshold and the Citizens’ Information Board, which analysed 90,000 queries to both bodies over a two-year period and found that tenancy termination and rent increases are the most prevalent issues facing private renters.
Vulnerable clients on fixed incomes were most likely to be adversely affected and at risk of homelessness when given a notice of tenancy termination.
Separately, new figures published by the Central Statistics Office yesterday showed that private rents have risen 11.9% in the last year while the cost of purchasing a home in Ireland has risen 12.2% in the same time frame. Home prices now are 2.2% higher than they were during the peak of the Celtic Tiger, with the median house price now standing at €295,000.
Threshold CEO John McCafferty said that the comments from Mr Dunne were “valid” and that institutional investors were also less likely to end a tenancy in order to substantially refurbish a property, given that they are often buying homes in brand new developments.
“What’s equally true, however, is that we generally aren’t seeing clients who are being housed by these institutions,” he said. “We’re generally helping clients on middle and low incomes, and institutions aren’t interested in housing those people.”
Mr McCafferty said the majority of renters live in homes owned by small landlords. In a case where those landlords decide to sell up, it can leave families in very difficult situations.
“They may tend to have a lower income and then have fewer options,” he said.
The Threshold CEO said that an eviction ban is a “crude” measure but one that must be taken to protect families at risk this winter.
“There’s nowhere for them to go in the private sector," he said. "And it could have negative impacts down the line on supply, but what alternative do we have?”
Threshold’s research and policy group chair Aideen Hayden, meanwhile, said that families on lower incomes are facing into a “very difficult winter”.
“People in those groups are paying more for absolutely everything,” she said. “They don’t have the additional resources to pay for it. Inevitably, they will fall into rent arrears. We need a national policy to assist tenants who fall into arrears.”
Ms Hayden also urged the RTB to “enforce some of the laws that are actually there”.
During leaders’ questions in the Dáil, Tánaiste Leo Varadkar indicated that the Government was currently “weighing up” a possible eviction ban.
“We have to weigh up the pros and cons,” he said, adding that it could lead to a “glut” of further homelessness whenever the ban lifts and lead more landlords to leave the sector.
“We don’t want to do something that helps a problem get a bit better for a few months, only to make it much worse in a year's time.”
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