Preventing property owners from selling or housing a family member will only suppress supply – Bruton

Preventing property owners from selling or from housing a family member will only suppress the supply of properties for rent, a Fine Gael TD has said.

Deputy Richard Bruton said: “Renting is a sector with high turnover and opportunities to exit arise regularly.

“Last year, landlords in Ireland entered an estimated 50,000 new tenancy agreements, while an estimated 10,000 decided to sell up instead. This represents an exit rate of one in six, a worryingly high level.

“The impact of a move to make it much more difficult to exit will undoubtedly reduce the new tenancies on offer, but it also can only encourage a higher proportion who given the chance, will take the exit route. This will be a double whammy for supply.

“It is tempting to imagine that preventing property owners from selling or housing a family member will support the supply of properties to rent. But, in reality, it will suppress supply.”

Deputy Bruton continued: “Last year, 30,000 new homes were built, and I expect this will be repeated this year.

“The Government funded almost one third of the new supply. This provided housing for those on the housing list at rents which represent an 80% subsidy on commercial rents.

“It also paid an 80% subsidy to over 10,000 other families eligible to be on the Housing List. This is historically the highest ever level of Government intervention. There is also a supply pipeline of further social housing at unprecedented levels.

“We now must refocus both public and private investment on delivering supply, and making the new housing schemes perform. The priority now should not be to try to trap existing investors in the market, but to get more homes built for sale through the affordability schemes, and to get investors willing to invest for the long term into a stable rental market.

“The target for such measures should be the 70,000 homes with outstanding permissions.

“The old saying says “Hard cases make bad law.” The unintended consequences of ill-thought out actions in the Irish property market have a long history,” Deputy Bruton concluded.

ENDS