As more information becomes available on the upcoming changes to rent controls, the Irish Property Owners Association (IPOA) expressed what they call “grave concerns” that upcoming changes will overwhelmingly harm rental supply and drive private landlords out of the market.
Among the key concerns for the IPOA are:
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Classifying landlords based on tenancies rather than properties unfairly impacts those with shared buildings like pre-63s or house-shares, where multiple tenancies exist under one title. This change could label them as ‘large’ landlords, restricting their ability to sell. The IPOA recommends landlords be classified by the number of properties, not tenancies, and that all tenancies in shared buildings reach market rent before new tenancy rules apply.
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Severely restricting reasons to sell, particularly for ‘large’ landlords, and requiring sales with tenants-in-situ significantly reduces property value, by up to 40%, and undermines landlords’ property rights and ability to manage their property according to their needs.
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The new measures provide no mechanism for ongoing indefinite or Part 4 tenancies to reach market rent due to being limited to the 2% rate or HICP, whichever is lower. These tenancies have been subject to RPZs since 2016 and as a result, are significantly below market rent. This may lead to economic evictions due to it being uneconomic for current landlords to stay in the market and thus selling up.
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Expanding RPZs to rural and tourist areas will damage local economies by reducing available short-term and holiday accommodation, which will now require planning permission, further hurting communities reliant on tourism.
The incoming changes will have immediate consequences, as landlords with vacant properties now or who expect to have vacancies in the coming months will be discouraged from renting them out, they claimed.
“Many are likely to sell due to concerns over losing property rights under the new rules or delay re-letting until the rules take effect, ensuring they can set market rent and avoid being locked into indefinite tenancies with below-market rates and no access to adjustment to market rent,” the statement read.
The IPOA also believes that the Government’s provisions raise important questions around property rights, which may warrant further legal consideration as the proposals advance.
Mary Conway, Chairperson of the IPOA, said: “The proposals and information that landlords have been given so far are unclear and truly concerning, for landlords, tenants, and the entire rental markets.
In effect, this uncertainty risks causing long-term harm to the very people these measures were designed to protect: tenants. By further reducing supply and removing landlord choice, particularly at the lower end of the market, the new legislative environment could exacerbate housing insecurity for many vulnerable renters.
Landlords across the country are in a state of limbo, with many left considering whether selling up is the best course of action. We need to retain landlords, and attract more investment, but the Government’s proposals risk doing the opposite.”
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