Appleton Property Rental Report December 2024
Anyone looking for a rental property will know how difficult it is at present to find suitable accommodation. There is effectively a two tier rental market, i.e. rental properties where the rent is subject to RPZ rent control limitations and new or first lettings of residential property at market rent.
Regardless, rent levels for the most part are high due to a high demand, low supply environment.
Any landlord with a property to let will know the significant challenges of regulation, taxation, and all the associated risks of the property letting business. One would imagine in an era of high rent that the number of people entering the property letting business would increase substantially. While the RTB report this week than new landlord registrations are up 5.7% year on year, this is a reversal of the trend in recent years. It is true that many landlords are leaving the business, however there remains a significant interest in residential property investment for certain categories of property. This level of activity is not improving the overall supply situation to any great extent.
To put some numbers on this, the number of properties available nationally to let in November 2023 was approximately 2750. That is nationwide. The number on the same day in 2024 was 2400, 14% lower. The number of properties to let on Nov 1st 2024 in the whole of Leinster, (excluding Dublin) was 430 from approximately 470 on the same day last year, 9% lower. Historically, from 2015 to 2019, the average number of available properties to let in Leinster was 850, almost twice the current level of availability.
The average rent being sought in County Kildare is now 2003 Euro per month. Bear in mind this includes Maynooth, Celbridge and Leixlip on the edge of Dublin. Advertised rental prices are up 46% in Kildare on pre Covid rent levels. By comparison, the national average rent sought is now 1955 Euro per month. This does not mean that the average rent being paid is 1955 Euro. This is the average price of advertised rental property for new tenancy creations. The majority of existing tenancies would have a lower rent due to RPZ rent control measures in place.
Landlords, i.e. people who provide rental accommodation, are often demonised in the media. The vast majority of these people have one and perhaps two properties which they have let. The purpose for many of these people is to provide a pension for themselves or a supplement to their pension in the longer term. We do not have very many institutional landlords outside of the cities. Without these one-off landlords we would have virtually no rental property at all outside the main urban centres. It is hard to envisage a situation where one off landlords left the stage. While it is unthinkable, little is being done to encourage landlords thinking of selling to stay in the market. Perhaps it is politically undesirable, nonetheless, a carrot is required. The stick won’t work in a free market where private property is protected under the constitution.
Rental income is treated in the same way as any other income, so for the most part net rent is taxed in the order of 50%. For those in an RPZ area, rent is capped and controlled regardless of the level of inflation. Landlords have to comply with a broad range of regulations from various government departments and have slow and limited recourse should things go wrong. It is correct and right to have a regulated rental property market with adequate protections in place for tenants that pay their rent and comply with the terms of the letting. Such regulations should look after the interests of both parties with expedience and efficiency.
Notwithstanding the challenges, property investment is still the most beneficial when compared to any other investment vehicle over a long period. Bricks and Mortar.
In simple terms, there is not enough rental property for those who need it. Supply is declining as demand increases. Availability is a huge issue and is one that is not easily fixed. We all know we need a greater supply of rental property throughout the country, not just in the greater Dublin area.
Now that the election is over, here is what I would like to see the new government do to improve the number of rental properties in the short term:
Consider incentivising landlords to stay in the business through the tax code.
Consider incentivising commercial property owners to convert their upper floors to accommodation on the streets of all towns in the country. This could be grant aided and would provide much needed accommodation across the country.
Consider properly incentivising families with a family member in a nursing home to rent their empty house. This could be a different category of rental with its own set of regulations to allow the family flexibility in their options in the event of a bereavement, probate etc.
Consider a conditional amnesty on unauthorised dwellings where a family have managed to accommodate one of their own in an unauthorised fashion on their own site. The self-funded actions of these people have taken pressure off the rental market.
Consider permitting more ambitious back land development where people with suitable accessible gardens can provide an apartment or house or modular home as a completely separate unrestricted dwelling.
Consider heavily incentivising the building of apartments outside the larger cities where there is significant demand in circumstances where the production cost of the apartments is not viable without assistance.
At Appleton Property we manage a large portfolio of rental property for many people who own one or two rental properties. We look after everything. We deal with the letting, the rent collection, the repairs and maintenance, the regulatory paperwork, we advise on compliance and provide a detailed statement at year end for convenient tax returns. On occasion if required we deal with the RTB and any other government body or third party on our clients behalf. Our fees are competitive and are entirely tax deductible. Having an independent property letting manager is essential, it reduces risk, improves your yield and makes financial sense. We look after your asset. For Best Results contact Austin Egan at Appleton Property.
We will send you a detailed list of what we do, how we do it and how much we charge for your consideration.
045 482759, 087 1311133 , info@appleton.ie , PRSA Licence No. 001344.
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