THERE has been a lot of talk this week about the fact that there has been a massive increase in the number of terminations of rental property contracts recently.
The Residential Tenancies Board revealed that, for the first half of this year, there were almost 60% more tenancies ended, than during the last six months of last year.
It’s not as if it wasn’t to be expected. This year we have had the ‘perfect’ storm of high property prices combined with high inflation and a rise in interest rates.
The landlords have seen the writing on the wall. With mortgages about to get a lot more expensive, unless you were cash-rich, getting out of the market was a no-brainer.
Very often these modest property owners became landlords by default. Two single people, each with their own properties, getting married and opting to rent out one of them.
That is how many of these tenancies came about. But recent years have not been kind to these landlords. Rising costs, fees to the aforementioned Residential Tenancies Board, increasing maintenance bills for apartment owners, high taxation, tougher regulation, all combined to make owning a second property an expensive luxury.
Many small landlords – that is, owners of one or maybe two rental properties – are most likely members of the hard-working middle classes in this country.
And part of the very same middle-class that has been rebranded the ‘squeezed middle’ in the last ten years – those who believe, rightly or wrongly, that they are paying the bulk of everything, and getting relatively little in return.
Yes, rents increased too, but very often the hike in all the other associated costs meant that, all things considered, there was little or no financial benefit in owning a second or third property.
And once property prices started to rise again, there was a queue of these landlords just waiting for the chance to exit the market.
Contrast that with the venture capitalists who have been buying up large chunks of our towns and cities en masse.
Earlier this year the Irish Independent reported that our 10 biggest private landlords owned almost 17,000 houses and apartments between them.
The large-scale institutional investors had either snapped up existing housing stock, struck deals with developers to buy off plans, or developed projects themselves – mainly in Dublin, but also in Cork and Galway.
And our government let this happen. In many instances, they have even facilitated it – by the lure of tax incentives, facilitating high rents and weak legislation for renters.
So now the ‘small guy’ is getting out of the game – the stakes have become too high for them, and we will be left with a rental sector that will be very significantly driven by the corporate sector.
As if our housing crisis wasn’t complicated – or serious – enough. It is difficult to see where all this will end if the government refuses to step in and halt the decline in the numbers of rental properties becoming available. And all of this at a time when the war in Ukraine is putting a strain on the housing sector, albeit for good reason.
It is easy to understand why many people – including entire families – are once again looking at the option of emigrating if they want to secure a home of their own.
