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Landlords are abandoning rental sector to cash in on market rise

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Landlords are abandoning the rental sector and selling off rental properties in significant numbers in an attempt to cash in on the lucrative property market.

New figures from the Residential Tenancies Board (RTB) outline how there were 498 notices of termination from landlords intending to sell between April and June this year.

A reduced supply of rental properties in the market will likely increase the cost of renting.

However, it does mean the supply of houses for sale will increase.

The figures supplied to the Irish Independent show a steady upward trend in landlords selling when compared with pre-pandemic levels.

The RTB received 367 notices in the second half of 2019 and 395 notices in the first quarter of 2020.

However, the number of landlords exiting the market may be even higher as thousands of tenants left cities during the pandemic and these homes could be sold without alerting the RTB.

Many have also waited for restrictions to ease to sell their properties, as landlords were not able to serve eviction notices when the 5km travel limit was in place during the pandemic.

Lucrative house prices as well as tight rent controls are the main reasons behind many landlords’ decision to sell, according to sources in the industry.

During the second quarter of 2020 the RTB received 53 notices of termination from landlords who wanted to sell their properties.

In Q3, this figure jumped to 186 and by Q4, it was 263.

At the end of March of this year, the figure fell to 157 due to lockdown restrictions.

However, it jumped to a high of 498 by the end of June.

The Irish Property Owners Association (IPOA) previously warned conditions for landlords, including rent pressure zones, are forcing them out of the market.

“Rent controls have distorted the market totally,” said Margaret McCormick of the IPOA.

“Continually changing legislation in the sector is encouraging landlords to leave the sector.

“It’s very difficult to rent a property – legislation is complex, there’s high taxation and when you have a difficulty, it takes a very long time to go through the RTB,” she added.

It is bad news for tenants who will be asked to leave their homes and look for somewhere new at a time when supply of rental accommodation is already low.

In June, homelessness figures rose to over 8,000 and homelessness charities sounded the alarm that a reduction in homelessness during the pandemic will be “short-lived”.

Mike Allen, Director of Advocacy at Focus Ireland, said there was a need for “more effective protections” for tenants and measures to reduce the numbers of landlords ­“selling up”.

“A chronic shortage of affordable homes to rent or buy means that, for families who receive a notice to quit, it is incredibly difficult to source alternative accommodation.

“This is placing many households at very serious risk of homelessness,” he said.

His concerns were echoed by Sinn Féin housing spokesperson Eoin Ó Broin, who obtained the RTB figures.

“What we are seeing is a very, very dramatic increase in notices to quit, suggesting that we are potentially looking at a very significant number of families presenting as homeless and going back to pre-Covid trends,” Mr Ó Broin said.

He has called on the Housing Minister to intervene now and “make sure that this does not lead to a steady increase in the number of families with ­children presenting as homeless”.


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