Tánaiste Leo Varadkar has said any move to incentivise landlords in the budget would have to happen in tandem with new and specific supports for renters, as he indicated relief may be forthcoming for both groups.
He said in the next number of months the Government will examine what “we can do to reduce the speed at which landlords are leaving the sector”.
“I know may not be popular to say so but the truth is more and more landlords every day are just selling up and have decided that it’s easier to sell their property than to continue to rent it, and we just need to reflect on that and see what we can do to improve things.”
“I do think that if there are any significant income tax or tax concessions for landlords in the budget, there should be something for renters as well. It wouldn’t be fair to say that we’re going to give tax concessions to landlords in order to keep them renting, which would be a good thing, but then to say to renters there is nothing there for them, that wouldn’t be fair.”
However, he said exact details haven’t been worked out and specific proposals have not been agreed yet.
Rents soared by the fastest rate on record in the second quarter of this year as the availability of rental homes reached an all-time low, according to a new report by property group Daft.ie.
The report shows the average market rent nationwide between April and June was €1,618 per month, up 3.3 per cent on the first three months of the year and more than double the low of €765 per month seen in late 2011.
It is also 12.6 per cent higher than the figure a year previously — the highest annual rate of inflation in rents recorded by Daft.ie since it launched its regular rental market reports in 2006, surpassing the previous peak of 11.8 per cent in late 2016.
Responding to the report, John-Mark McCafferty, chief executive of tenants’ rights group Threshold, said people trying to find homes to rent were facing “unjustifiable increases” in prices.
The housing charity warned there had been significant increases in average rents in parts of the country not covered by rent pressure zones capping annual hikes at 2 per cent.
“In Donegal, Leitrim and Longford for example, increases range from €140 to €165 a month. This is the cost of a child’s uniform or their schoolbooks for a new school year and is resulting in increased financial strain on families already struggling to pay the bills,” he said. There were also regular cases of landlords disregarding the legal caps on annual rent increases, he added.
Mr McCafferty said Threshold was concerned that the pressure in the rental market would have a serious impact on students starting or returning to college from next month.
At present cheapest market rents would exceed State financial grants for lower-income students or what someone could earn working part-time, the charity said. Threshold advised students searching for accommodation for the college year to be aware of scams and fraudulent adverts, which often claim to be renting properties for cheaper rates.
The Daft.ie report found there were just 716 homes available to rent nationwide on August 1st, down from almost 2,500 a year ago.
The national landlords representative organization said the stark increases in numbers of landlords leaving the rental sector was not surprising.
Susan Clancy, development officer at the Irish Property Owners’ Association (IPOA), said this was the result of “excessive and ever-changing regulation, punitive taxation and the vilification of landlords”.
“Increased supply of accommodation is the only solution to the housing crisis, rent control reduces the supply of available accommodation, the evidence is clear; with increasing landlords leaving the sector since its introduction,” she said.
The State needed to move away from housing policies that discriminate against private landlords and gave them “little incentive to participate in the rental market,” she said. “If private landlords continue to exit the market, the situation is going to get much worse,” she said.
Focus Ireland said it was calling for “urgent Government action” to help stop the “exodus of landlords” from the private rental market.
“In the first half of 2022, the number of eviction notices jumped by 58 per cent, compared with the latter half of 2021,” it said. “Focus Ireland said the published data show that the biggest rise in evictions is due to landlords selling their property.”
Ronan Lyons, associate professor of economics at Trinity College Dublin and author of the report, said the resurgence of the economy over the past year has “accentuated the chronic shortage of rental housing”.
“While the professional rental sector has added more than 7,000 new rental homes in the last five years, this is small relative to the fall of 30,000 in rental listings each year in the traditional rental sector in the same period or the fall of 100,000 listings per year since 2012,” he said.
“Further, while nearly 23,000 are under construction, the remainder are earlier in the process and the growth of legal challenges to new developments presents a threat to addressing the rental scarcity.”
Sinn Féin housing spokesperson Eoin Ó Broin said the latest report was “deeply troubling”, with rents having never been higher and the number of available properties on the market to rent never lower. Mr Ó Broin said it was clear Minister for Housing Darragh O’Brien had “lost control” of the rental market.
Social Democrats social justice spokeswoman Holly Cairns said the report showed “the depths of the rental disaster”.
The Cork South West TD said the situation had become unsustainable. “Extortionate rents are driving ordinary workers to the brink. This is especially true given the price of everything else — energy, food and fuel — is also skyrocketing in the midst of a worsening cost-of-living crisis,” she said.
People Before Profit TD Paul Murphy said the housing and rental crisis had “reached a new low”.
Mr Murphy said the Government had “sat on its hands” and had failed to address the deepening crisis. “What we need are radical measures including the declaration by the Government of a housing emergency,” he said.