3pm Tuesday 5th December, 2023
IPAV WARNS NEW TENANT PURCHASE BILL WILL EXACERBATE FLIGHT OF LANDLORDS
“Increased interest rates have, sadly, set fire to the dying embers of unsustainable debt for many,” – Pat Davitt, IPAV Chief Executive
The Residential Tenancies (Right to Purchase) Bill 2023, intended to give tenants a first right of refusal to purchase a rented property when it’s put up for sale, is unnecessary since what it seeks to provide is already happening in the market, instead the legislation is likely to encourage the further flight of private landlords from the market, IPAV, the Institute of Professional Auctioneers & Valuers, warned the Oireachtas Joint Committee on Housing, Local Government and Heritage today (Tuesday).
Presenting to the Committee IPAV Chief Executive, Pat Davitt said it would set a precedent for intervention in a landlord’s right to sell a rented property that any future Government could easily extend and consequently it would prompt more private landlords to flee the market, further reducing the availability of rental properties.
“It would have the effect of further diminishing the rights of property owners, making investment in rental property a far less attractive proposition than it has already become because of excessive and unbalanced regulation between owners and tenants,” he said.
This Bill would elongate the sales process, frustrating many potential and genuine buyers where a tenant could not match those offers but for whatever reason decides to exercise all available options. “In fact the legislation could raise tenant expectations in an unrealistic manner,” Mr Davitt said. And, he said the Bill would, effectively, set a minimum period over which a sale takes place.
He said many landlords may have restructured a loan but with increasing interest rates, are once again struggling to meet repayments. “A quick sale, never intended, may now relieve pressure and rescue them financially. Deputies, Senators, I assure you from what our members are seeing, the legacy of the last financial crash lives on. Increased interest rates have, sadly, set fire to the dying embers of unsustainable debt for many,” he said.
And he said a tenant’s right to bid to purchase does not apply to the sale of multiple unit developments, further exacerbating the unequal treatment of private and institutional landlords.
Mr Davitt said while the Bill does make provision when property is being transferred for no or partial consideration to a family member, it is not comprehensive enough. “The tenant’s right to bid for the property should not arise where a landlord intends to transfer the property to a spouse or certain defined family members, as well as inheritance rights.”
He said rather than further restricting the rights of private landlords IPAV would encourage legislators to prioritise measures that will increase supply. “If supply is improved, virtually all of the other difficulties in the market will be eased and fall away, the market will work,” Mr Davitt said.
This Bill, if implemented, he warned, would make investment in private rental much less attractive at a time when this is already a grave concern.
Research by IPAV and IPOA, the Irish Property Owners’ Association and involving over 880 such landlords last year found:
- The major cohort by far, 43%, became a landlord for pension purposes;
- The next biggest cohort, about a quarter, did so to gain an income;
- Only 13% did so for ‘extra income’;
- Accidental landlords formed less than 10%;
- Over 70% were self-employed and
- Almost 6 in every 10 had debt to service.
Ends