Richard Curran: 'Rental crisis is set to continue as some landlords decide to exit'
The housing problem won't be fixed any time soon. This is borne out when you look at the Residential Tenancies Board (RTB) quarterly survey of the rental market.
It shows that rents continue to rise as many would expect. The good news is that the rate of rises is softening, especially in areas which are designated as rent pressure zones.
The limited rent controls introduced in these rent pressure zones are finally having an effect in slowing down the rate of rent increases. This is good news, because the enormous rents being paid by tenants is not only detrimental to society but will take its toll on the economy too.
The theory behind rent pressure zones is that they should hold back exorbitant and unaffordable rent increases in these areas until such as time as more houses are built, supply improves and the pressure weakens.
Not a bit of it. One figure in the report is particularly troubling. The number of tenancies registered in the third quarter of 2018 was 25,448. This was a lot more than in Q2 this year, but renting is seasonal. The best figure for comparison is the number of tenancies registered in the same quarter in 2017 - 29,528. In 2016 it was over 30,000.
This tells us there are fewer properties coming available each year for rent - not more. Some of the decrease might be explained by a trend towards longer leases but still only one quarter of tenancies registered last year were for longer than 12 months.
According to the RTB the number of landlords is reducing with 1,778 fewer landlords registered than three years ago. It is a modest number given the 174,000 registered landlords but it reflects fewer rental properties coming on the market at a time of desperate demand.
With record rents being achieved by landlords it might seem counter-intuitive as to why some of them are getting out. There are different reasons at play, just as there were different reasons why they got into becoming landlords in the first place.
Landlords don't all exactly fit the Mr Rigsby character of the 1970s British TV sitcom Rising Damp.
How many ordinary couples ended up being accidental or reluctant landlords because they had an apartment, one of both of them used to live in, which became stuck in negative equity in the crash?
As house prices have gone up, the numbers in negative equity have gone down, thereby providing an escape valve for those who didn't really want to be landlords at all.
According to the RTB 86pc of landlords have either one or two properties to let. With all of the compliance, higher costs and restrictive rules around tenancies and rent, they may feel like simply selling up and taking a profit on the value of the house. This depends on their age profile and when they bought.
There are also some disincentives for newer landlords to get into the market. They are competing against commercial investment funds which pay lower taxes. They have to have a sizeable percentage of the value of the house as a deposit to get a commercial mortgage, and they may see the whole landlord thing as just too much hassle.
Whatever about the myriad of explanations the rental market remains utterly dysfunctional. People are paying far too much of their after-tax earnings on rent and there seems to be very little anyone can do about it, other than slow down the rate of increase in some areas.
The state is paying over €500m a year to private landlords in various rent supports. Rents are at record highs. Landlords are nevertheless leaving the sector - albeit in small numbers. The so-called surge in house-building doesn't seem to be making any dent in the rental markets difficulties.
Every Brexit scenario now looking like a 100/1 shot
Irish businesses have been told to prepare for Brexit for the last two-and-a-half years. It is good advice, except which Brexit should they be preparing for? As the political pantomime continues in London, many business managers might ask whether there will be a Brexit at all.
If someone is running a betting book on what will happen with Brexit, every option should be 100/1.
The Irish Government, its civil servants and its state agencies were early to grasp the implications of the Brexit referendum in June 2016. In fact, the first position paper commissioned by a Government department into the implications of Brexit was produced as far back as December 2014 - a year-and-a-half before the vote.
The Government has also been very upfront in publishing reports it has commissioned into the cost implications of a hard or soft Brexit. This was not the case in the UK where the government delayed publishing its findings on the implications of various Brexit scenarios. Bad news was dubbed Project Fear while really bad news would have encouraged too many questions about the 'Brexit means Brexit' approach taken by Theresa May's government.
But where the Irish government has fallen down is publishing details of its no-Brexit contingency plans. It is as if this scenario isn't covered in a detailed way.
Businesses have been told to plan for a hard Brexit from the start. With a very real risk of a no-deal Brexit still on the cards, it took shock tactics among Brexiteers in the UK raising fears about temporary food shortages here, to put the issue on the table for discussion.
The Government will not want to be alarmist and will not want to give an indication that it is planning for such a scenario while it still faces huge pressure to soften its position on the Border backstop.
However, the Brexit train looks increasingly like stopping at just one of two stations - no deal or no Brexit.
One interesting scenario being posited in London this weekend is that Theresa May could agree to threaten the parliament with a second referendum if they do not back her Brexit plan.
It might win a few additional Tory MPs over in a vote but hardly all of the 117 who voted against her leadership last week.
On the other hand it also seems unlikely that the House of Commons will ultimately vote to leave without a deal. There is no majority for that either. We were always told that a majority of MPs wanted to remain even as the public voted otherwise.
A second referendum, albeit introduced by Theresa May, an alternative Conservative Prime Minister or a Labour government, is a very real possibility after a suspension of Article 50 to buy more time.
However, can the Irish Government and Irish business bank on it? I don't think so.
An Post shows mortgage intent
An Post's decision to seek expressions of interest for a new mortgage business partner shows real intent to get into this market. It is a welcome move in that it represents more competition.
But reports during the week raised questions about An Post's ability to get a strategic partner for a mortgage venture that could seriously undercut existing operators.
Billy Kane's new Finance Ireland venture into mortgages for example, promises to be 'competitive' but not the cheapest mortgage in the market.
The fact that An Post is only formally seeking expressions of interest now was interpreted by some as showing it doesn't have a lot of the groundwork done. But the deadline for submissions is just six weeks away, which is tight enough to suggest it may well know exactly what it is doing.
Sunday Indo Business