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Close to a quarter of renters said they didn't live in an RPZ when they actually did. Shutterstock
rtb

Over 70% of small landlords have a neutral or negative attitude towards Rent Pressure Zones

The latest Rental Sector Survey report by the RTB also indicates that only 44% of tenants know what a Rent Pressure Zone is.

THE MAJORITY OF small landlords have either a neutral or negative attitude towards Rent Pressure Zones.

Rent Pressure Zones (RPZ) are in parts of the country where rents are highest and rising, and where households have the greatest difficulty finding affordable accommodation.

Rents in a RPZ cannot be increased by more than 2% per year.

The finding is in the 2023 Rental Sector Report by the Residential Tenancies Board, which began in April 2022 and was completed in July 2023.

The RTB described the report as “one of the largest and most extensive pieces of research ever undertaken on the private rental sector in Ireland”.

The report is based on a nationally representative survey of tenants, landlords, and letting agents via face-to-face surveys, telephone surveys, interviews and focus groups.

This included around 1,200 face-to-face surveys, as well as 500 telephone surveys of small landlords and 250 telephone surveys with medium landlords.

Rent Pressure Zones

The report defines small landlords as those owning one or two properties, and 72% of those surveyed were either neutral or negative towards RPZs as a measure to address rental inflation.

While 28% viewed the measure positively, 32% viewed it negatively and 40% were neutral.

Of those small landlords who have a negative attitude towards RPZs, 50% said they were “unfair to smaller landlords” and 43% said RPZs “do not reflect cost increases to landlords”.

Some 39% said RPZs didn’t reflect the market or expenses, while 32% said RPZs “force landlords to increase their rent or get stuck”.

Smaller medium landlords – those with between three and 20 properties – were more negative towards RPZs.

Only 17% had a positive attitude towards it, while 54% gave it a negative rating.

Of those who gave it a negative rating, 24% said it is “one sided in favour of tenants” and 15% said the “market should dictate the price”.

Meanwhile, 41% of renters surveyed said they have “no knowledge at all” of what a Rent Pressure Zone is.

Almost a quarter (24%) reported that they didn’t live in a RPZ when they actually did, and 43% of those renting within an RPZ were unaware that they were doing so.

Only 33% of tenants renting within an RPZ were aware of this.

Of the renters surveyed, 44% knew what RPZ measures were, and this awareness is highest in Dublin at 56% and stands at 49% in Rent Pressure Zones.

Rental experience

Overall, tenants were positive about their experience of living in the private rented sector.

Some 83% were “positive or very positive” about renting their current property and only 3% were “negative or very negative”.

When asked to rate their current neighbourhood, 84% were “positive or very positive” but only 67% were “positive or very positive” about their experience of the private rental sector in general.

On average, tenants spent close to a third (32.44%) of their net income on rent and 31% of tenants indicated that their current rent is higher than when they moved in.

The report also indicated an “upward trend” in relation to deposits and rents, both in and outside of Dublin.

  • Read more here on how to support a project by Noteworthy to investigate why Irish rents are still so unaffordable.

The main concerns of tenants included a lack of supply and some stated that the “default is to stay put” as a result of this shortage.

Insecurity of tenure is also an issue, impacted by a shortage of properties available to rent.

One respondent said: “You have no security – especially with the way the market is. Everyone is just dreading getting a notice of termination.”

Most renters described their property as a “house” and not as a “home” because of this insecurity.

Renters also cited affordability as a main concern and said a “key fear is not being able to find something similar for comparable rent”.

All renters said they were impacted by the cost-of-living crisis and energy costs in particular.

Some also wanted to improve energy ratings of their homes but as private tenants are not allowed to do so.

The majority also have neutral or positive relationships with their landlord, and this is another reason why some stay where they are as the “default”, because they worry of “being exposed to a negative relationship with a future landlord should they move”.

Some 44% of tenants see themselves still renting privately within the next five years, but 49% expect to be homeowners within the next ten years.

Meanwhile, 26% are marked as “other”, which means they might emigrate, return to the country they migrated from, or return to the family home.

Within the next 12 months, 85% still see themselves renting privately.

Small landlords experience

Of the small landlords surveyed, 79% were aged 45 and over and 94% identified as part-time landlords.

Nearly half of all rental properties (46%) were acquired with an owner occupier mortgage, 26% were buy-to-let, 19% were bought outright, while 7% were inherited.

For most recent tenancies, small landlords believe that rent was set ‘below market rent’ in the majority of cases (58%) and ‘at market rent’ in 39% of all cases.

When asked for their motivation in setting rent below what they believed to be “market rent”, half said it was because they were happy with the current tenants and 34% said they wished to keep rents in line with what the tenant can afford.

And while 53% say that their own experience of being a landlord is positive, 55% are unlikely or very unlikely to recommend becoming a landlord.

However, 90% of landlords stated that they have a “very positive or positive” relationship with tenants.

Meanwhile, 27% of properties owned by small landlords are likely to be sold within the next five years and for those intending to sell, 48% cite the wish to no longer be a landlord, while 45% say taxation on rental income is too high.

Medium landlord experience

Among medium landlords with between three and 20 properties, 45% purchased their rental properties with a buy-to-let mortgage, while 33% bought it outright.

Some 8% purchased it with an owner occupier mortgage and 6% inherited the property.

Of those surveyed, two-thirds (66%) increased rents last year, while 3% decreased rents.

These landlords are more likely to sell within the next five years, with 37% stating that they are “likely or very likely” to do so.

Meanwhile, 21% say they are “likely or very likely” to reclaim a property in the next five years.

Director of the RTB Niall Byrne said today’s report will “enhance the understanding of the profile as well as the concerns and intentions of landlords, tenants and letting agents in Ireland”.

He added that this type of “research is important in identifying and monitoring trends across the rental sector”.

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