Landlords must be incentivised not to sell properties, says IPOA

A report released last week suggested that two in five residential property sales initiated during the last three months of 2022 were landlords leaving the rental market. Picture: Colin Keegan, Collins Dublin

Landlords will continue selling up, taking rental properties off the market permanently, unless they’re given the “right incentives” by the Government, a representative body has warned.

The Irish Property Owners Association has said the State needs to take “bold, urgent” action rather than persisting with “menial tweaks to the system which only incentivise landlords to sell up”.

The IPOA has today reacted to a report released last week from the Society of Chartered Surveyors of Ireland, which suggested that two in five residential property sales initiated during the last three months of 2022 were landlords leaving the rental market.

Another report from Simon Communities of Ireland also showed that there are just 41 properties available across the country for people in receipt of the Housing Assistance Payment, with none at all in Cork City and its suburbs. 

Meanwhile, homelessness has hit grim new heights, with a record 11,542 people in emergency accommodation in November.

It all comes as the housing and rental crisis looks set to continue, with construction inflation and other factors raising concerns that homebuilding targets for the current and following years may not be reached.

Rents, meanwhile, continue to increase, and have risen by 82% since 2010, according to figures published last month. Compared to our European counterparts, only rents in Estonia and Lithuania have risen at a higher rate than Ireland’s in that time. The CSO’s Consumer Price Index also has private rents up 11% in the year to November 2022.

In recent months, property website Daft.ie also reported that rents continue to rise, with the increase from June to September 2022 coming in at 4.3%, the single largest quarterly increase ever recorded in its series of reports, which dates back to 2006. 

Against the backdrop of landlords leaving the sector in what the IPOA described as being in the face of “unsustainable taxation and regulatory burdens”, it said that meaningful action is now required from Government to discourage more from selling up.

“Like the wider population, landlords have had to contend with rising maintenance and mortgage costs amid the spike in inflation, with no means to offset costs for those with properties in RPZs [rent pressure zones],” it said.

All this comes on top of a high tax burden of up to 52% for non-institutional landlords, compared to 0% for institutional investors.” 

It said that measures in Budget 2023 had no impact on preventing more private landlords leaving the sector, and more action is urgently needed from Government.

IPOA chairwoman Mary Conway.

IPOA chairwoman Mary Conway said: “A reduction of tax on private landlords’ rental income with a commensurate rise in the rate paid by institutional investors in residential property will achieve an outcome that will avert further blockages to housing supply.”