Irish State could be inadvertently complicit in small landlords losing their investment BTL properties in RPZs.

azerty said:
My understanding is that it's a rent increase legislation. It applies to everyone. New entrants are setting a rent, they are free to set that rent. They are not in the identical situation as the existing landlords. Then they are bound by the same legislation. I once again am not defending RPZ as a good system but the same rules for rent reviews apply to everyone in the RPZ zones.
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They are as they are providing an identical service. Take taxi drivers as an example new taxi drivers can't charge a higher rate than existing ones for the same trip. This is the unfairness of the rpz legislation.

I agree it is rent increase legislation but it is counterproductive. Those charging lower rent will leave the market replaced by those who will charge a higher rent. The net result is that rent levels will increase.

I appreciate you are not defending rpz but I think you are seeing it through a very narrow lens not realising the bigger picture.
 
I am fully aware of the bigger picture. The consequences of the legislation and its impact on the rental market as well as my personal finance. However I also think that actions need to be taken by the government in terms of housing costs. I don't believe that there is an absolute right for a landlord to charge exorbitant prices because he can. The current rent I received would have been considered high a few years ago, now it's way under what a new landlord could charge.
The situation in the rental sector is catastrophic and the current decisions are making things worst. I don't have the solution to sort it. I don't believe that allowing landlords to set the rate the way they want will actually be helpful right now. The sector is too distorted.
You tried to make a legal argument saying that existing landlords and new landlords were in the identical situation. They aren't. One is setting a rent, one is reviewing. The law has created a two tiered system, I know that. But it applies to everyone the same way.
 
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azerty said:
I am fully aware of the bigger picture. The consequences of the legislation and its impact on the rental market as well as my personal finance. However I also think that actions need to be taken by the government in terms of housing costs. I don't believe that there is an absolute right for a landlord to charge exorbitant prices because he can. The current rent I received would have been considered high a few years ago, now it's way under what a new landlord could charge.
The situation in the rental sector is catastrophic and the current decisions are making things worst. I don't have the solution to sort it. I don't believe that allowing landlords to send the rate the way they want will actually be helpful right now. The sector is too distorted.
You tried to make a legal argument saying that existing landlords and new landlords were in the identical situation. They aren't. One is setting a rent, one is reviewing. The law has created a two tiered system, I know that. But it applies to everyone the same way.
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The State can't expect all of the benefits of capitalism while at the same time try to control the market and not expect it to react. The current rent you receive may be considered high compared to the past but costs have increased significantly. You may be happy to provide some form of social service with lower rent but I am not. I seen the rent I could charge fall through the floor in the early 2010's and tenants leave at the drop of a hat.

I did not make any legal argument referencing existing and new landlords. From a business perspective they are being treated differently and hence one of the reasons they are leaving the market.

A recent example again is the taxi industry. We don't have enough taxis to meet demand and there was a recent recruitment campaign which I understand was not successful.

If you don't make a market attractive either in terms of profit or favourable trading conditions then suppliers will leave the market.

Simple economics show when supernormal profits are earned new suppliers enter the market. Supply increase to meet demand at an equilibrium point where normal profit is earned.

The solution is not to try control the market and not expect it to react. Either let the market find its equilibrium or leave it and build large scale social housing.
 
Greenbook said:
ETF disposal or deemed disposal actually subject to income tax not CGT
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EFT disposal and deemed disposal is and was subject to income tax. Nothing changed.

The introduction of RPZs and limits on rent increases were a major interference in the market by government. Investors back in 2013 when Govt was incentivising property investment can reasonably feel hard done by, that the government unfairly changed the rules. Price controls like this are unprecedented.

See posts 4,6 and 57 for this subplot.
 
2013 investors feeling hard done by . Really! They benefited from CGT relief and huge increase in the value of their asset.
 
CarrotStick said:
Hi Azetry What would you do if you were the investor in the first post of this thread?
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As I previously said, I don't know how such investor will manage his financial situation. But as long as the law is not deemed unconstitutional, I fail to see how the state can be deemed liable.
 
I think CarrotStick your points about the regulation of the rental market being detrimental to the market and the common good and contrary to a concept of social justice (due to two identical landlords receiving different rents) are valid but may be too abstract to ever be actionable legally and certainly hard to get consensus on here. The eviction ban would of course further impact on your original post because presumably the property would have to be sold with tenant in situe at a significant discount at the moment. IANAL but I suspect the government linking the eviction ban to homeless numbers could be legally challenged - why should the private rental market be seized up to take up the slack for homelessness? Whatever the differential to the benchmark acceptable number of homeless is (11,000?) why doesn't the government use other emergency measures to house the excess instead of relying on emergency measures that impacts the private rental market only. I think in those terms a case could be put forward by someone with deep pockets and a lot of time on their hands.

I think many on here do recognise the big picture issues but are loath to admit to that for some reason, they reiterate nonsense about landlords exiting not affecting net numbers of units in the rental market, ignore that an evicted family, when a small landlords sells right now, are probably looking at much increased rent anyway, as the only available supply in the market to move to is coming from institutional landlords (new rents are increasing 14% year on year even in RPZs), and claim that all of the continuous populist regulatory changes are somehow a reasonable risk of investing etc. (and have presumably no concern at all of impact on investment needed for supply everyone knows we need going forward).

Consumers/renters are getting a worse and worse deal out of this but getting any agreement on that on this consumer site seems very difficult - I don't know why this is because anyone I talk to 'in the real world' sees the situation as very short sighted. My own suspicion is that there is politics at play on here too.
 
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RonnieShinbal88 said:
I think CarrotStick your points about the regulation of the rental market being detrimental to the market and the common good and contrary to a concept of social justice (due to two identical landlords receiving different rents) are valid but may be too abstract to ever be actionable legally and certainly hard to get consensus on here. The eviction ban would of course further impact on your original post because presumably the property would have to be sold with tenant in situe at a significant discount at the moment. IANAL but I suspect the government linking the eviction ban to homeless numbers could be legally challenged - why should the private rental market be seized up to take up the slack for homelessness? Whatever the differential to the benchmark acceptable number of homeless is (11,000?) why doesn't the government use other emergency measures to house the excess instead of relying on emergency measures that impacts the private rental market only. I think in those terms a case could be put forward by someone with deep pockets and a lot of time on their hands.

I think many on here do recognise the big picture issues but are loath to admit to that for some reason, they reiterate nonsense about landlords exiting not affecting net numbers of units in the rental market, ignore that an evicted family, when a small landlords sells right now, are probably looking at much increased rent anyway, as the only available supply in the market to move to is coming from institutional landlords (new rents are increasing 14% year on year even in RPZs), and claim that all of the continuous populist regulatory changes are somehow a reasonable risk of investing etc. (and have presumably no concern at all of impact on investment needed for supply everyone knows we need going forward).

Consumers/renters are getting a worse and worse deal out of this but getting any agreement on that on this consumer site seems very difficult - I don't know why this is because anyone I talk to 'in the real world' sees the situation as very short sighted. My own suspicion is that there is politics at play on here too.
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RonnieShinball88

Thank you for your viewpoints about this Issue. I have to say that when a very frequent poster to this forum and a supposed consumer advocate reiterates nonsense about landlords exiting the marketplace not effecting net numbers of units in the rental market, an eyebrow must be raised. I am starting to believe what you say in the last paragraph of your post. Look at the content of post 4 and 5 as an example. The strategy of controlled opposition springs to mind.
 
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I sympathize with your situation
It's crazy paying 7% interest rate
Back in 2010 I was paying 5.7% variable rate
And then I was returned to tracker
Before I was returned to tracker I was having conversations about insolvency.

If you can't get away from the 7% you can consider selling/insolvency.

If you can switch to something like 4% it might be manageable.

Also you are racking up losses paying 24k interest which is deductible. If you are ever lucky enough to make a profit you can use losses carried forward.

Sorry I'm not sticking with your original question!
 
moneymakeover said:
I sympathize with your situation
It's crazy paying 7% interest rate
Back in 2010 I was paying 5.7% variable rate
And then I was returned to tracker
Before I was returned to tracker I was having conversations about insolvency.

If you can't get away from the 7% you can consider selling/insolvency.

If you can switch to something like 4% it might be manageable.

Also you are racking up losses paying 24k interest which is deductible. If you are ever lucky enough to make a profit you can use losses carried forward.

Sorry I'm not sticking with your original question!
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Hi moneymakeover,

What would be your view on the State’s regulations regarding its introduction of RPZ’s and its effect on the borrower’s plight set out in the scenario at post 1. Has the State not closed off the only avenue available to this individual to comply with his contractual obligations as set out in his BTL mortgage loan agreement? I think this issue would make a very interesting legal argument down the Four Courts.
 
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CarrotStick said:
Hi moneymakeover,

What would be your view on the State’s regulations regarding its introduction of RPZ’s and its effect on the borrower’s plight set out in the scenario at post 1. Has the State not closed off the only avenue available to this individual to comply with his contractual obligations as set out in his BTL mortgage loan agreement? I think this issue would make a very interesting legal argument down the Four Courts.
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Hey I fully agree. Why should the people providing the accommodation be penalised? That's ridiculous.

In your case you are in the situation of paying 7%
To me that is another injustice
I'm just not sure you can join the two in a court case. Judge will say why are you paying 7%?

RPZ has gone from bad to worse.
Originally there was 4% limit and that was to apply I think if HICP inflation was below some number for 3 consecutive quarters.

That was replaced by this crazy rule that rent increase cannot be higher that the lower of:
  1. HICP inflation
  2. 2%


So now HICP inflation is 10%. (bread milk petrol) the landlord is expected to remain at 2%
Even though an interest only mortgage may have increased by 300%
(Tracker going from 1% to 4%)
 
What really takes the biscuit is that the tenants will need to find a new rental home.
In the current market that is going to be much higher rent that the artificially low RPZ controlled rent that drove the BTL owner out of the market/into bankruptcy.

So who benefits from this, the new landlord.
Rents in RPZs are going up 14% year on year - how is that possible when the idea of RPZs is allegedly to cap them at 2%?

Could it be that this whole process is not in fact reducing rents but is increasing them by driving out small landlords and that increased rent is going to institutional landlords?

Doesn't sound like much of a win for the consumer!
 
Rent controls have never worked anywhere. Why would it be any different?! They are going to drive more and more landlords out, suck supply to the bone and only investors attracted in are going to initially ask for sky high rents knowing they are limited to 2% per annum going forward.
 
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