Usually September 1st marks the end of a quiet period on the housing front and the start of pre-Budget speculation, with hopeful interest-group campaigning. Not this year.
Our rental market is in chaos. Promised student accommodation is not being delivered in time for the academic year; locals in County Kildare are now protesting the use of new housing for Ukrainian refugees; demand keeps soaring and new supply is not even scratching the surface. And still local residents celebrate the failed planning applications for vital housing, PRS and student schemes in every regional city in the country.
In effect, we cannot deliver enough new rental stock, nor can we stop the existing rental stock from diminishing every single month. It is nonsense.
While we have been highlighting the increasingly onerous legislative and compliance burdens that smaller-scale or non-institutional landlords in Ireland face, recent weeks have demonstrated that even our members of Government – the policy makers – are struggling to keep on the right side of compliance. At this stage, tweaking is not going to work. There needs to be a dismantling of some of the most unhelpful housing policies with a view to practically facilitating a professional, well-run, but not overly complex rental system that is balanced and fair to both tenant and landlord. Even record levels of demand and record high monthly rents are not enough to keep landlords from exiting the market, there needs to be a thorough examination as to why this is happening.
We understand that Ireland’s housing crisis is complex and there are many facets to be addressed, but the years of tweaking are not having any real impact. The reality is – as most in the industry have known for many years – only new supply at scale can help at this stage (not necessarily newly-built but also, unused stock being brought back into use). All efforts and State initiatives ought to be focused on this, however, there is a problem that appears unsurmountable. Stimulating supply properly means streamlining planning and incentivising (likely subsidising) property development and construction. We have known this for years, so too have our policymakers, but there has been a distinct lack of political bravery. We saw this through the introduction of the current Help to Buy scheme that was framed as a buyer support, despite being a much needed, supply-side initiative. Why was it not identified and communicated as such?
Earlier this summer, it looked like something was ready to shift. After years of acknowledging the exodus of landlords from the market, the current Government indicated a willingness to address this. For Budget 2023, there was hope for some element of political bravery through the introduction of taxation equalisation and other measures for non-institutional landlords, however, the political landscape has shifted once again. Can this current Government be seen to be incentivising property investors at this time? It will certainly require political bravery but, is now the right time – will it ever be the right time?
Lotus Investment Group