independent

Sunday 16 December 2018

Rents reach all-time high as supplies fall

Tenants struggle to find homes as rents reach €1,400 a month for a one-bed place, writes Mary Fogarty

Rents being paid now are higher than the peak figure in 2008.
Rents being paid now are higher than the peak figure in 2008.

A prospective tenant hoping to rent a one-bedroom apartment in Bray can expect to pay in the region of €1,400 per month for the property.

A recent search on Daft.ie showed just seven homes available to rent in total in the town, with the price of a three-bedroomed semi-detached house ranging from €1,500 to €1,800. Two years ago, the market price of a two-bedroom apartment was €1,400 per month and considered huge.

Putting all that into perspective, a person or couple with a household income of, say €50,000, is unlikely to be permitted to borrow more than €175,000.

The repayments on that sum would be around €800. The reason that the banks won't lend any more than that, is because a higher sum would be deemed unaffordable for that borrower.

In circumstances where a person is on their own, in the private rental market, and unable to afford to rent their own place, prices in Bray for a room in a shared house currently range from €500 to €1,000.

While there were just seven properties advertised on the private rental market, a search on Airbnb told a different story.

A search for two guests, renting the entire property, for the first week in September, returned 29 results.

According to a recent report by Daft.ie, rents in Wicklow were on average 11.9 per cent higher in the second quarter of 2018 than a year previously. The average advertised rent is now €1,335. This is 73 per cent higher than when the average rent was at its lowest point.

The chairperson of the Labour Party and Dáil Candidate for Wicklow, Jack O'Connor, expressed his concern at the revelations from the Daft.ie Report that rents being paid are now higher than the peak figure in 2008.

He said that urgent government action is needed to cap the rate of rent increases, and regulations should be introduced to clamp down on Airbnb rentals.

'The shocking statistics in the Daft.ie report show that in Dublin rents have increased by 13.4% over the past year so we can safely assume that rents being demanded in areas in North Wicklow would be similar to that of Dublin,' he said. 'At a recent public meeting organised by the Wicklow Labour Party in Bray, speaker after speaker related their experience of not being able to afford rents in Bray and Greystones.'

Another speaker told her story about how she had been told by her landlord that her lease was not being renewed because a family member needed to move into the apartment she was renting. It turned out, however, that the same property was subsequently put up on the Airbnb official site along with the other apartments in the same house.

The Bray woman has now moved back into her old box room in her parents' house after being asked to leave her apartment of two years.

'He initially said he was increasing the rent. I told him that wasn't allowed. Bray is in a rent pressure zone and landlords can only increase the rent by four per cent. The next day, I got home from work and there was a letter there giving me notice to leave the property.'

The landlord told her in the letter, which has been seen by this newspaper, that the formal lease had expired the previous year, and since then she had been a guest at the property on a month-to-month basis.

'I knew I had legal standing, but I didn't want to pass this person in the hallway and stay somewhere I wasn't wanted,' she said.

'I'm in the very fortunate position that I can go home to my parents' house and they are happy to have me. At the moment I'm trying to save for a deposit. But there are so many people not in that position,' she said.

While she counts herself lucky to have a roof over her head, the tenant said that there is something fundamentally wrong with the system. There are hardly any rental properties available in Bray, and any advertised are practically unaffordable. 'I've worked my whole life,' she said. 'I've been renting in Bray for eight years. Now I'm in the box room of my parents' house.'

Mr O'Connor said that the cost of renting has become totally unaffordable for many people. 'The demand for rental property hugely exceeds the supply but the situation is being exacerbated by property owners now turned to the Airbnb market rather than letting out properties to young people and to families,' he said. 'Many European cities have already introduced regulations to curb the worst excesses of Airbnb and short-term rentals.'

Mr O'Connor said that the solution to these problems lies in the supply of social and affordable homes.

Deputy John Brady said that 'rents have spiralled out of control and show no signs of slowing down'. He said that the rent pressure zone strategy was 'unambitious' to begin with and the crisis requires further action.

'We are heading to it being perhaps the highest it has ever been,' said letting agent Margaret Short, director of Rea Forkin estate agents.

She said that the main cause of the high prices is lack of available properties.

'There are more and more tenants, both private and social. There are more people than ever looking, and fewer properties, so prices go up,' she said.

'The four per cent rent pressure zone has assisted somewhat, but demand is going through the roof.'

She added that many people are not in a position to buy, so people aren't moving out of the rental market. 'There was a natural cycle where people would rent for a while, save their deposit, then buy. So many now can't get finance to buy,' she said.

Margaret added that there is no incentive for landlords to join the market. 'There are regulations, tax, RPZ, but very little to encourage them to invest,' she said.

One reason for the short-fall in supply is that many of the 'reluctant landlords' of the downturn sold their properties when o they climbed out of negative equity. The market favours the owner now, but there was a time just a few years ago when many of those were forced to supplement rental with their own money to meet mortgage payments.

One solution, Margaret believes, is the provision of more housing. 'If we don't get more houses to the rental market, the demand is going to get higher and the cost to the tenant will continue to increase.'

Bray People

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