Number of landlords who are selling up as rents drive to new highs

A ‘relentless’ exodus of landlords is pushing average rents across the country close to €2,000 a month, it has been claimed.

Such is the extent of the flight from the market that one in every four property sales so far this year has been by a landlord selling up, new research shows.

Now, property experts are calling for changes to the tax system to encourage landlords to stay in the market.

Keith Lowe, head of estate agents DNG which did the research, said: ‘The exodus of investors appears relentless with 25% of all house sales so far this year from investors leaving the market.’

DNG will again be calling for the inclusion of new tax incentives in Budget 2025 to make it more attractive for land – lords to stay in the market.

‘The only positive outcome is that buyers of investment properties are, in the majority, homeowners. But it is keeping rental levels high.’

Average rent nationally now is €1,836 a month, up from €1,750 a year earlier. But in all areas of Dublin, it is above €2,000, with south county Dublin up to an average of more than €2,600.

Rent in Limerick city is €1,933 on average, Cork city is €1,870 and Galway city is €1,861. In the first three months of the year, 18,000 new tenancies were registered with the Residential Tenancies Board (RTB).

However, there are just over 2,000 homes to rent, according to the latest Daft. ie report – well below the long-term average of 2,600.

At the same time, 4,810 notices to quit were notified to the RTB and in the final three months of last year, 4,005 eviction notices were served. Some 80,000 tenancies have been lost to the market as landlords sell up, according to the Irish Property Owners’ Association (IPOA).

The number of tenancies is different to the number of properties for rent as most rental homes, apart from one bed-flats, are shared with multiple tenants.

The number of private rental tenancies registered with the RTB has fallen for the third year in a row.

The RTB annual report, which went before Cabinet, showed there were 223,979 private tenancies registered at the end of 2023, a decrease of 22,474 from the end of 2022 when there were 246,453, a fall of over 9%.

The flight of investors from the letting market has been an ongoing problem for a ‘very long’ time, the IPOA warned. It appears that 80,000 tenancies have been removed from the market in just five years ago, says its chairman Mary Conway.

‘That is 80,000 properties, anything from one-bed studios to five- or six-bed houses, so it could be multiple numbers of renters affected.’

A recent analysis of the property market up to June shows many first-time buyers are snapping up ex-rental properties. Ms Conway added: ‘First-time buyers, typically a couple who are starting out, have a former rental property that might have had five or six people living in it.

So more and more people are being squeezed out. You will hear these were accidental landlords that were cashing in their chips – they weren’t for the most part.

A lot of our members have only one property and they bought it as a pension; a lot are self-employed, plumbers, plasterers, tradesmen.

‘They don’t want to rely on the State pension so they buy an investment property, they do it up and let it. But people are now cashing in before their pension age because they just don’t want to be landlords any more. There’s nobody replacing them. Landlords are just voting with their feet and saying it’s just not worth the hassle.’

Many properties are being sublet by tenants for double the agreed rent without the landlord’s knowledge.

‘If you look at some of the ads on Facebook you will see nine people in a house and it’s a three-bed house; one bed vacancy in a female room. In a lot of cases the landlords aren’t even aware of it. It’s a black market.’

She added: ‘There is an exodus of landlords. Nobody can go on with rent controls.’

However, it is understood that the RTB believes the decrease in the number of private rental tenancies is due to historical tenancies falling off the register.

Sinn Féin’s housing spokesman, Eoin Ó Broin, said the trend of small private landlords selling up and getting out of the market has been steady since 2017. ‘They have a right to go. We shouldn’t try and stop them.’

Mr Ó Broin said the pattern of landlords leaving the market is due to the high prices their properties can command in the current market.

‘Many single-property landlords were cashing in on an investment before their retirement. The problem is the Government doesn’t have a plan in place to ensure that as those single-property landlords exit, that it doesn’t have the disruptive effect it’s currently having.’

He added: ‘Tweaking around with tax measures won’t make any difference.’

In Budget 2024, the Government provided tax relief to landlords to the tune of between €600 and €1,000 per year for the next four years.

Mr Ó Broin said the tenant-in-situ scheme has had an impact in keeping people in rented accommodation when their landlord wants to sell up in the past 12 months.

It allows a tenant who is receiving housing support to ask the council to buy their home so they can remain there once the landlord has sold up.

He said the scheme needs to be maintained in future, and the Government needs to ramp up building social and affordable housing.

‘We’re now nearing the end of the Government’s housing plan and it has never been as hard to buy a home. It has never been more expensive or more insecure to rent a home.’

‘Social housing lists are getting longer and the number of people in emergency accommodation is higher than it has ever been before.’

Fine Gael housing spokesman John Cummins said: ‘It’s essential that we strike the balance between the rights of tenants and landlords.’

Extra reporting by Aisling Moloney