Government must act now to stop landlords leaving market, warns estate agent

Minister for Housing Darragh O'Brien speaking following the Cabinet meeting on Tuesday. Picture: Damien Storan

The Government must act now to stop landlords leaving the market, according to the managing director of Sherry FitzGerald's residential and advisory section.

Marian Finnegan was responding to the confirmation that the eviction ban will be phased out from the end of this month. 

Many tenants will be protected from eviction in the immediate future due to notice periods which protect tenancies.

Ms Finnegan told RTÉ radio’s Morning Ireland that landlords have been leaving the rental sector for the past 10 years and were “speaking with their feet”. 

She said the sector has become "non-viable" for many landlords, and they had hoped the Government would use the term of the eviction ban to do something that would stop landlords leaving the market in such high numbers.

“We've seen an exodus of landlords. Ten years ago, there were two landlords leaving for every one investor in the marketplace. Last year, we reached a point where 37% of our vendors were landlords leaving the marketplace.

What that means in numbers is that over 21,000 landlords left the market last year. They're leaving for a variety of reasons.

Marian Finnegan, managing director of Sherry FitzGerald: 'Private landlords are not responsible for the State's housing policy, but it's been placed on their shoulders and something more needs to be done to address the situation.'

Ms Finnegan claimed some were leaving because of the need to bring in extra funding for their family, others were leaving because the tax situation made the investment non-viable.

“Others are leaving because the structure around lettings is so complicated that they can't cope with it anymore. But they're speaking with their feet. 

"And, unfortunately, this eviction moratorium, which was brought in in October, led people to believe that something would be done to stop that outflow of landlords.

“But literally nothing was done until the last minute of the last month when we had a meeting last night with the Government where they decided what they would do to address the situation.

“Private landlords are not responsible for the State's housing policy, but it's been placed on their shoulders and something more needs to be done to address the situation.” 

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Regulation of the rental market had become “incredibly intense”, she said, with many landlords uncertain what their next steps should be. The tax structure had also become “more challenging”.

While regulation of the sector was necessary, it needed to be balanced “so that everyone can operate in the marketplace”, Ms Finnegan said. 

Rent controls had been brought in in an effort to slow down rental inflation, which was fine as a concept, but the reality was that rent controls had the opposite impact on the marketplace, she said.

“They make it even more challenging for private landlords to exist, and they make a simple decision with their own investment not to remain in the marketplace. 

So when you see 21,000 landlords leaving the marketplace in a 12-month period, you know you're doing something wrong. You need to take action then."

When asked if the new owners of rental properties continued to rent them out, Ms Finnegan said the “outflow” of landlords was significantly greater, three to one, of new investors in the rental market.

As interest rates rise, the cost to the landlord also rises and the viability of their investment goes down, she added.

“The situation is not going to improve unless something is done, but it needs to be done this month, not in six months' time.”