Inspex Team Appointed

Kilkenny County Council is currently undertaking private rented inspections and has an official agreement with Inspex for the provision of housing inspections to ensure properties available for letting in the Kilkenny County Council administrative area are in compliance with the Housing Standards Regulations 2019.

The current minimum standards for rented accommodation are set out in the Housing (Standards for Rented Houses) Regulations 2019 and specify the requirements in relation to a range of matters including structural repair, sanitary facilities, heating, ventilation, fire safety as well as the safety of gas and electrical supply.

Annually, the Department of Housing Local Government & Heritage (DHLGH) requires that 25% of all registered tenancies with the Residential Tenancies Board (RTB), in the administrative area of all Local Authorities, are inspected to ensure compliance with the Housing (Standards for Rented Houses) Regulations 2019. At end 2020, there were 4209 private registered tenancies in the Kilkenny County Council administrative area.

Where properties are deemed to be non-compliant following inspection, the Housing Acts 1966 to 2014 allocate the responsibility for enforcement of the Regulations to the Local Authorities.

All landlords, including Approved Housing Bodies (AHBs), have a legal obligation to comply with the standards and must ensure their properties are fully compliant with fire safety and minimum standards regulations for rental properties.

As part of its agreement with Kilkenny County Council, Inspex notifies landlords and or tenants of the requirement for a property to be inspected, inspects the rented property and determines whether the property complies with the minimum standards.

Failure to comply with the minimum standards set out in the Regulations can result in legal action, prosecution and penalties. Kilkenny County Council may issue Improvement Notices and Prohibition Notices to landlords whose properties remain in breach of the Housing (Standards for Rented Houses) Regulations 2019.

Logo for Irish Refugee Council (IRC) who engages the Inspex team to undertake a proactive inspection programme of its nationwide properties

IRC Proactive Inspection

The 1951 Refugee Convention outlines the rights of people that are displaced, to seek asylum from persecution in other countries as well as the legal obligation of states to protect refugees, considered by many to be among the most vulnerable people in the world.

The Irish Refugee Council (IRC), formally set-up in 1992, provides support and services to refugees and people seeking asylum in Ireland.

The Community Sponsorship Ireland initiative enables local communities to play an active role in the integration of families and individuals resettling in Ireland.

People resettling under Community Sponsorship Ireland are registered as refugees by the United Nations High Commissioner for Refugees and are invited by the Irish Government to Ireland under the Irish Refugee Resettlement Programme.

With the support of the IRC, a Community Sponsorship group provides support for one family that has been invited to Ireland under the Irish Refugee Protection Programme.

Working in collaboration with the IRC and Community Sponsorship Groups, Inspex undertakes proactive inspection of properties nationwide to ensure the properties meet the required accommodation standards.

Inspex continues its collaboration with the IRC supporting this housing initiative that makes an important and worthwhile difference in people’s lives.

Business man searching icon screen interface to show real estate assets as a ommodity

Concrete Plans

The Irish residential housing market is currently characterised by demand far outstripping supply while the demand on the part of international capital for real estate assets is currently unsatiable. Does this appetite really push house prices up and squeeze out owner-occupiers?

Over time, Government policies changed from being housing providers to being ‘facilitators.’  These policies have left governments somewhat accountable to investors, worsened housing affordability, accelerated a decrease in homeownership and a simultaneous increase in private renting.

The financialisation of housing refers to the transformation of housing and real estate markets by corporate finance; hedge funds, private equity, banks, insurance and pension funds, and other financial intermediaries with massive amounts of capital to invest.

Global real estate is a more valuable asset class than all stocks, shares and securitised debt combined – which, together amount to just US$170 trillion. The value of all the gold ever mined throughout history pales into even greater insignificance at a mere US$6.5 trillion.

The dominance of financial markets in the housing sector means that houses are algorithmically assessed, bought and sold in bulk landing straight in the portfolios of institutional investors and large-scale landlords while often bypassing the potential homeowner.

The combination of natural increase and positive net migration suggests the population of Ireland is to increase to 6 million by 2050. If the housing stock is to reflect the country’s demographics, close to 50,000 homes need to be built each year until 2050. Simply put, investment funds are needed to meet the country’s housing need and to reduce the burden on the State to deliver this housing.

The arrival of foreign capital in Ireland bypassed domestic banks and established a direct link between foreign capital and the Irish property market. Based on recent investment funding patterns, Ireland needs significant foreign investment to meet its housing need - an extra €75bn each decade, of which €70bn is likely to come from international sources.

Both international and Irish-based studies confirm that Ireland is one of the most expensive places in the world in which to build. The Society of Chartered Surveyors Ireland (SCSI) puts the cost of delivering apartments in Dublin at between €493,000 and €619,000 so the price metrics to sell these units to owner-occupiers just don’t work. Over the past decade, most of the bigger schemes in Dublin have been built on a forward purchase or a pre-let agreement, while the construction players engaged in largescale housing put significant demand on labour and material resources.  This leaves little for the small to medium sized builders to work with to deliver product for the owner-occupiers. All of this creates the perception that owner-occupiers are being squeezed out of the market.

For critics, institutional landlords are the vultures who prey on the wreckage of a monetary crisis and separate house prices and rents from local incomes. On the other hand, some argue, all supply is good supply particularly given the acute housing shortage and the need for investment in both the sale and rental market.

The private rental sector (PRS) in Ireland has trebled in size since 2000 – partly because of declines in social housing provision and also because it has become more difficult to become an owner-occupier.  Until the arrival of international capital, Irelands' PRS had been served by a large number of small landlords. The Rental Tenancies Board (RTB) says that around 86 per cent of landlords own one or two properties and supply just over half the total market. But recent RTB figures show the profile of landlords is changing with 26% of small landlords with 1-2 tenancies intending to sell a property within the next five years. Large landlords (with 100+ tenancies) plan to continue to invest and expand their portfolios.

Those who support the idea the institutional approach professionalises the rental sector might be suprised by the findings of a recent study of 1200 PRS housing standards inspections.  This study reveals 3 per cent of compliant properties and 11 per cent of non-compliant properties is owned and managed by the institutional landlords.

Institutional PRS investment is driven by long term demographic and housing policy trends, resulting in structural affordability problems in homeownership markets and the absence of social housing. In the context of declining home ownership, a declining number of private landlords and significant funding invested in the PRS across a number of public housing schemes, our local authorities have a critical duty to ensure rented accommodation, in their administrative areas, follow the regulatory standards

Contract Signing

Inspex Team Reappointed

Offaly County Council extends its official agreement with the Inspex team for the provision of housing inspections, IT and support services to ensure properties available for letting in the Offaly County Council administrative area are in compliance with the Housing Standards Regulations 2019.

The current minimum standards for rented accommodation are set out in the Housing (Standards for Rented Houses) Regulations 2019 and specify the requirements in relation to a range of matters including structural repair, sanitary facilities, heating, ventilation, fire safety as well as the safety of gas and electrical supply.

Annually, the Department of Housing Local Government & Heritage (DHLGH) requires that 25% of all registered tenancies with the Residential Tenancies Board (RTB), in the administrative area of all Local Authorities, are inspected to ensure compliance with the Housing (Standards for Rented Houses) Regulations 2019. At end June 2020, there were 3,630 private registered tenancies in the Offaly County Council administrative area.

Where properties are deemed to be non-compliant following inspection, the Housing Acts 1966 to 2014 allocate the responsibility for enforcement of the Regulations to the Local Authorities.

All landlords, including Approved Housing Bodies (AHBs), have a legal obligation to comply with the standards and must ensure their properties are fully compliant with fire safety and minimum standards regulations for rental properties.

As part of its agreement with Offaly County Council, Inspex notifies landlords and or tenants of the requirement for a property to be inspected, inspects the rented property and determines whether the property complies with the minimum standards.

Failure to comply with the minimum standards set out in the Regulations can result in penalties and prosecution. Offaly County Council may issue Improvement Notices and Prohibition Notices to landlords whose properties remain in breach of the Housing (Standards for Rented Houses) Regulations 2019.

Inspex Team Reappointed

Dun Laoghaire Rathdown County Council (DLRCOCO) extends its official agreement with the Inspex team for the provision of housing inspections and support services to ensure properties available for letting in the Dun Laoghaire Rathdown administrative area are in compliance with the Housing Standards Regulations 2019.

The current minimum standards for rented accommodation are set out in the Housing (Standards for Rented Houses) Regulations 2019 and specify the requirements in relation to a range of matters including structural repair, sanitary facilities, heating, ventilation, fire safety as well as the safety of gas and electrical supply.

Annually, the Department of Housing Local Government & Heritage (DHLGH) requires that 25% of all registered tenancies with the Residential Tenancies Board (RTB), in the administrative area of all Local Authorities, are inspected to ensure compliance with the Housing (Standards for Rented Houses) Regulations 2019. At end June 2020, there were 19,630 private registered tenancies in the Dun Laoghaire Rathdown administrative area.

All landlords, including Approved Housing Bodies (AHBs), have a legal obligation to comply with the standards and must ensure their properties are fully compliant with fire safety and minimum standards regulations for rental properties.

Where properties are deemed to be non-compliant following inspection, the Housing Acts 1966 to 2014 allocate the responsibility for enforcement of the Regulations to the Local Authorities.

Failure to comply with the minimum standards set out in the Regulations can result in penalties and prosecution.

Where there are HAP tenancies in place, under Section 41 Part 4 of the Housing (Miscellaneous Provisions) Act 2014, the property must comply with the relevant housing standards legislation. If an inspection finds the property does not meet the required standards, the Local Authority can suspend or cease HAP payments.

Dun Laoghaire Rathdown County Council may issue Improvement Notices and Prohibition Notices to landlords whose properties remain in breach of the Housing (Standards for Rented Houses) Regulations 2019.

As part of its agreement with Dun Laoghaire Rathdown County Council, Inspex notifies landlords and or tenants of the requirement for a property to be inspected, inspects the rented property and determines whether the property complies with the minimum standards.

Rented houses compliance

Fair Procedures

With significant public investment in the private rented sector (PRS), consistent application of housing standards and fair enforcement of the regulations are needed. Our local authorities have a public duty to ensure rented housing complies with minimum accommodation standards.

A strong and viable PRS is a key component in a healthy housing market while the quality of rented accommodation is critical to sustaining the sector over the long-term. Residential rental properties should provide safe, comfortable and environmentally sustainable homes for those who live in them. Updating and improving accommodation standards and regulating their application are essential.

For the period from 2014 to 2020 the number of private registered tenancies with the Residential Tenancies Board (RTB) increased by 17.39%. All landlords, including AHBs and student specific accommodation (SSA) providers are obligated to register their tenancies. Currently, there are 334,588 tenancies registered.

Local authorities play an important and strategic role in meeting new and existing housing needs through their involvement in the provision of housing by Approved Housing Bodies (AHB’s) and housing units through the Department of Housing, Local Government and Heritage (DHLGH) funding streams, such the Housing Assistance Payment (HAP) and Rental Accommodation Scheme (RAS).

The allocation for the housing programme increased by 230% (€943 million to €3.1 billion) between 2016 and 2021. In 2019 total expenditure on public housing was almost €2.6bn, HAP and RAS schemes accounted for almost 50% while leasing (Social Housing Current Expenditure Programme (SHCEP)) and RAS accounted for almost 30%. The overall capital allocation for DHLGH in the current year is €2.8 billion, an increase of €500 million on 2020.

In the context of the current high-level of demand for a limited supply of rented housing stock and significant public funding invested in the PRS our local authorities have a critical duty to ensure rented accommodation, in their administrative areas, follow the regulatory standards.

Without an inspection system in place, there is no mechanism to ensure that dwellings comply with standards. The purpose of an effective inspection regime is to recognise the importance of safety standards and in this context ensure a rented property complies with the minimum accommodation standards as set out in Housing (Standards for Rented Houses) Regulations 2019.

Substantially increased DHLGH funding has been made available to local authorities each year since 2018 to enable the authorities to build inspection capacity and deploy external contractors such as Inspex. The number of inspections more than doubled from 19,645 in 2017 to 40,728 in 2019.

Annually, the DHLGH expects that 25% of all registered tenancies with the Residential Tenancies Board (RTB), in the administrative area of all local authorities, are inspected to ensure compliance with the Housing (Standards for Rented Houses) Regulations 2019. Where properties are deemed to be non-compliant following inspection, the Housing Acts 1966 to 2014 allocate the responsibility for enforcement of the Regulations to the Local Authorities.

Where properties are deemed to be non-compliant following inspection, the Housing Acts 1966 to 2014 allocate the responsibility for enforcement of the Regulations to the Local Authorities. Failure to comply with the minimum standards can result in penalties and legal proceedings. With sufficient resources made available, the local authorities are now more likely to issue Improvement Notices and Prohibition Notices to property owners whose properties breach the Housing (Standards for Rented Houses) Regulations 2019.

Current social housing tenants have existing rights under the Housing Acts 1966-2019 and the provisions of the Housing (Standards for Rented Houses) Regulations 2019 apply to all local authority dwellings. While social housing is regulated under the above Acts, private rental tenancies are regulated under Residential Tenancies legislation. A goal of the ‘Housing for All’ plan is to examine whether the social housing sector requires independent regulation.

Consistent application and fair enforcement of standards is critical to sustaining the PRS over the long-term. A proficient deployment of IT means that Inspex provides its local authority clients’ consistent inspection and verification services when capturing, analysing, and determining the condition of private rented dwellings and in particular confirming whether minimum accommodation standards are met under the relevant housing legislation.

Student Specific Accommodation

Built For Profit

Student Specific Accommodation (SSA) is housing built or designated for students.  This includes purpose-built student accommodation (PBSA) and accommodation that is let for the sole purpose of providing accommodation to students during the academic year.  While PBSA is an important component of the government’s housing strategy, its critics argue that PBSA is built for profit and not according to what students need.

In recent years, the unprecedented growth in those participating in higher education – 168,000 in 2014 to an estimated 193,000 in 2024 has led to an increase in demand for suitable student accommodation.  In tandem, the purpose-built student accommodation sector (PBSA) has seen significant growth, between 2014 and 2020, almost €950m worth of PBSA assets transacted. From an investment perspective, being relatively insulated from market cycles, student housing performs well.

The Government’s Rebuilding Ireland Action Plan 2016 underlined the importance of providing well designed and located student accommodation to meet demand.  The objective of the Government’s National Student Accommodation Strategy 2017, was to incentivise affordable student housing and ensure an increased supply of PBSA bed spaces -  an additional 21,000 places by 2024 – to ease demand pressures in the private rented sector (PRS).  The strategy also highlighted the significant upfront capital investment required to increase PBSA supply and the necessity to seek the funding shortfall from private developers.  Recent reports indicate of the 8,229 PBSA units completed since 2016, 84% are privately delivered and €87 million in tax breaks granted to the PBSA providers.

The Residential Tenancies Acts 2004 to 2020 deal with the regulation of the mainstream PRS including the approved housing body (AHB) sector.  The Residential Tenancies (Amendment) Act 2019 brought SSA under the remit of the RTB in July 2019. This means that SSA tenants have most of the same rights as private tenants (excluding Part 4 provisions).

Under the Residential Tenancies (No. 2) Bill 2021 students now have safeguards in place around the payment of rent in advance, notice periods and refunds. The Bill ensures any upfront payment upon the commencement of a tenancy is restricted to a total value that does not exceed two months’ rent i.e., a deposit and one month rent in advance. This restriction applies to all tenancies including for students. A student can make a larger upfront payment by way of an opt-out option but they cannot be forced to do so. The Bill also provides that the notice period in respect of student specific accommodation is limited to a maximum 28 days’ notice. All SSA providers must now comply with the law governing rent reviews. From 16 July 2021, for tenancies in a Rent Pressure Zone (RPZ), rent calculations are based on the Harmonised Index of the Consumer Price (HICP) values.

Critics of PBSA development argue there is an over reliance on the private sector for its provision and the reason why the cost of PBSA is rising beyond the reach of the average student. In terms of rents charged for accommodation within PBSA schemes for the 2020/2021 academic year, rates varied depending on schemes but the average advertised headline rent in Dublin was approximately €9,000 for 39 weeks in line with the previous year. Some operators offer incentives to take-up accommodation and as such, the average effective rent was about 2% less overall.

More recently, PBSA providers report a lack of student demand that has led to Dublin City Council (DCC) granting permission to convert student beds to short-term lets. These change-of-use decisions have led to some serious accusations that DCC is perpetuating the student housing crisis.

Purpose-built student accommodation is defined as housing built or designated for students.   Between 2014 and 2020, almost €950m worth of PBSA assets have transacted in Ireland and €87 million given to the private operators in tax breaks.  Clearly PBSA is an important component of the government’s housing strategy but its critics argue this is housing that is built for profit and not according to what students need.

Fire Safety Week 2021 Fire Safety Week 2020 highlights how smoke alarms can save lives

Fire Safety Week 2021

National Fire Safety Week 2021 is an initiative from the Department of Housing, Planning and Local Government designed to highlight fire safety particularly in homes.

The responsibility in respect of fire safety in rented dwellings was not conferred on to landlords until the introduction of the Housing Regulations (2008), despite the first iteration of these Regulations being in effect since 1993. Additionally, landlords must be familiar with their obligations under Fire Services Act 1981 that refer to the “person having control” of premises in terms of fire safety, to ensure safeguards are in place and safety measures followed to protect those occupying and enjoying use of the premises.

The current Housing (Standards for Rented Houses) Regulations 2019 provide guidance on the delivery of fire safety measures in private rented dwellings.

In a rented house, a landlord is responsible for ensuring the property contains a working smoke alarm in the ground floor hallway and each upper floor landing of a stairway and a fire blanket securely wall-mounted in the kitchen.   The smoke alarms can be either mains wired with a battery back-up or long-life battery units.

In a rented apartment, a landlord is responsible for ensuring the property contains an emergency evacuation plan permanently positioned inside the front door together with a sounder, suitably located and working mains smoke and heat alarms and a fire blanket securely wall-mounted in the kitchen. The emergency evacuation plan plan should have a floor plan showing exits and location of fire equipment the exact address of the apartment, relevant contact phone numbers, and the actions to be taken in the event of an emergency.

Overall responsibility to prevent occurence of fires in apartment blocks lies with the Building Owner or its Management Company, where one is employed, to carry out fire safety management.  In the common areas of an apartment complex there should be a common fire detection and alarms system, manual fire alarm call point at each floor level with emergency lighting throughout.

Despite legislative, regulatory and practical efforts by the legislature, complying with Regulation 10 Housing (Standards for Rented Houses) Regulations 2019 remains an area of confusion and concern amongst landlords.  The confusion on the part of property owners coupled with persistently high rates of properties contravening the standards, it seems not enough has been done yet to sufficiently highlight to landlords what their responsibilities are.

Inspex supports National Fire Safety Week 2021, raising awareness about the fact that most people who die in fires, die from smoke inhalation and not from burns and it can take as little as 3 minutes to die from smoke inhalation.

Real estate trends

RTB/ESRI Q2 2021 Rent Index

The RTB Q2 2021 Report produced by the Residential Tenancies Board (RTB) and the Economic and Social Research Institute (ESRI) tracks price developments in the Irish rented housing market.  All private residential landlords, Approved Housing Bodies (AHB) and landlords of Student Specific Accommodation (SSA) register their tenancies with the RTB. The current Report is based on rents paid on 13,844 private tenancies registered with the RTB in Q2 2021 compared to the 16,085 tenancies registered in Q1 2021.

The RTB’s data shows a total number of 297,837 active tenancies and 165,736 landlords as being registered at end 2020. Of these, 86 per cent of landlords own one to two properties but provide just 53 per cent of the private tenancies registered. According to the RTB, the private rented sector landscape is changing with large landlords having clear intentions to expand their portfolios and 26 per cent of small landlords planning to sell a rental property in the next five years.

The standardised average rent published on a quarterly basis covers all new registered tenancies within that quarter which are submitted to the RTB and excludes all existing registered agreements. The current Report is based on rents paid on 13,844 private tenancies registered with the RTB in Q2 2021 compared to the 16,085 tenancies registered in Q1 2021.

Q1 2021 saw unemployment remaining high, falling to 25.5 per cent in March, while the retail sales index recovered in February 2021 (to 122.7), returning to similar levels prior to the onset of the pandemic. Coinciding with the easing of public health restrictions combined with the vaccine roll-out, Q2 2021 is characterised by strong economic activity, with unemployment falling rapidly from 23 per cent in April to 16.2 per cent by June 2021.

The number of tenancies registered with the RTB in Q2 2021 was 13,884 and 16,085 in Q1. This represents a 13.6 per cent decline in the number of tenancies registered between the first and second quarter of 2021.

Due to the availability of jobs and amenities within urban areas, a large proportion of the population is concentrated in cities and as a result, housing demand is highest in these areas. Over half (58 per cent) of all tenancy agreements registered were in Dublin and the Greater Dublin Area (GDA) with 61.6 per cent of the registered tenancies being for apartments or flats.  In Dublin, 77.6 per cent of registered tenancies were for apartments, 47.6 per cent in GDA and 44.9 per cent in the rest of the county.

While rents in Dublin City were 1.2 per cent higher in Q2 2021 compared to Q1 2021, the year-on-year growth rates in Cork City and Galway City were 6.3 per cent and 9.2 per cent respectively. In Q2 2021, Dublin City monthly rent averaged €1,775, Galway City €1,355, Cork City €1,344 and €1,196 in Limerick City.

As of Q2 2021 the standardised average rent in the GDA was at €1,397 and €1,007 outside the GDA. Year-on-year price inflation was lowest at 4.4 per cent in the Dublin area and highest at 10.8 per cent outside the GDA.

The standardised average rent for houses in Dublin - €2,105 per month – is more than double the standardised house rent - €1,031 per month - outside the GDA.  Year-on-year house rents grew at 7.3 per cent in Dublin and at 11.5 per cent outside Dublin. Annual rental price inflation was strongest outside the GDA where houses grew at 11.6 per cent year-on-year.

The standardised average rent for apartments in Dublin in Q2 2021 - €1,798 per month – is more than double the standardised apartment rent - €982 per month – outside the GDA.  Year-on-year apartment rents grew by 3.9 per cent in Dublin and by 8.7 per cent outside Dublin. In Q2 2021, apartment rental prices outside the GDA experienced the strongest annual growth with an increase of 9.4 per cent year-on-year.

For both houses and apartments, year-on-year growth was strongest outside the GDA. On an annualised basis, the county with the fastest growing rents in Q2 2021 was Leitrim at 17.3 per cent year-on-year growth, while Laois, Sligo, Wicklow, Mayo, Offaly, Kilkenny, Longford and Clare all had annualised growth rates above 10 per cent.

Supply and demand

No Place Like Home

Housing affordability is a controversial topic globally because people on average wages are priced out of the housing market, particularly as salary increases have failed to match hikes in rental and housing. Feeling squeezed by increasing rents and house prices, voters threaten to make their frustrations felt at ballot boxes and politicians respond with policies aimed at controlling rental and price increases.

Changes in population and household formation have significant implications for housing demand.  With the population in Ireland projected to increase by 1,953,300 by 2051, 53.8% of the increase due to net inward migration and 46.2% due to natural increase, real housing demand in Ireland is now estimated to range between 32,000 and 50,000 units per year.  Delivering sufficient housing to create an affordable choice for renters and owner purchasers is an immense challenge and one that is not likely to be solved in the short or medium term.

In Ireland a decade of under-investment following the property crash in 2008, has led to a significant decrease in the housing stock per capita.  As a result of persistent housing shortages, house prices have grown faster than household income and home affordability has worsened.

The standard method to measure affordability is to define a threshold value that housing cost should not exceed as a proportion of household income. In the United States, affordability is considered a problem if housing expenditures exceed 30% of income. By comparison Eurostat sees households spending more than 40% on housing as overburdened. Tenant organisations are increasingly targeting 25% as a threshold. Given the competing definitions, the widely accepted metric for affordability is above a level of 30% of gross income is ‘unaffordable’.  Nationally, an average home is listed as being €303,000; €412,000 in Dublin and €254,000 outside of Dublin.  This means that people on average wages (€40,000 gross per annum) are priced out.

While incomes have grown recently, rents have grown much faster, putting increasing pressure on the ability to save.  High rental costs, extends the time needed by a potential first-time buyer to accumulate down payments via savings. The number of years needed for a first-time buyer to save the required down-payment to purchase an average house in Dublin increased by between one and two years between mid-2014 and mid-2016, and by between three and six months in the rest of the country. The cost of paying rent while saving to accumulate a down payment postpones homeownership. While the age that marked the changeover between renting and home ownership was broadly stable between 1991 and 2006 (27 years on average), it increased from 28 years in 2006 to 35 years in 2016.

Home affordability has worsened for both tenants and homebuyers in Ireland since 2013, especially for low-income tenants and homebuyers living in and around Dublin. Property and rental prices have increased faster than household disposable income while the relative cost of housing is higher for tenants than for owners.

The traditional developer and buy-to-let landlord in the private rented sector are being replaced by institutional investors.  While institutional investors enjoy the benefits of organisational structure, economies of scale and stronger equity, greater compliance and regulatory costs, rent control and the current tax regime continue to drive smaller investors from the housing market.

The high cost of building apartments in Dublin is more than owner-occupiers or first-time buyers can afford.  In the first six months of 2021, investors funded the supply of 2,949 new homes for the rental market. Even though investment funds have had the capacity to pay the high construction costs of apartment blocks in urban areas while satisfying the Government’s requirement to deliver scale in a demanding housing market, others believe some of the larger landlords are of now of sufficient scale to possess rent setting powers in certain locations.

For housing to be more affordable, supply must increase.  Encouraging construction activity is vital but simply building more houses is not the solution. The balance between owner occupied and build-to-rent developments needs to be effectively managed to deliver affordable rents which frees up the money to save for a deposit.

The ‘Housing for All’ plan includes the aim of building 90,000 social houses, 36,000 affordable homes, around 18,000 cost rental homes, and 164,000 private ownership and private rental homes by 2030. It is reported the project has more than €20 billion in funding through the Exchequer, the Land Development Agency (LDA) and the Housing Finance Agency over the next five years.

Housing affordability is a controversial topic because people on average wages are priced out of the housing market, particularly as salary increases have failed to match hikes in rental and housing. Constructing new affordable homes and increasing housing stock is not something that takes a short amount of time. If affordability continues to be an issue in Ireland more people may demand government steps in between developers, landlords and renters.  Such interventions can be costly and may not be in the interest of everyone.