Rent pressure zone status has had no real impact

When Dundalk was classified as a Rent Pressure Zone (RPZ) in July, 2017 the hope, more than the expectation, was that there would be some relief for those renting or seeking to rent houses in town.

The RPZ designate an area or a town where rents cannot be increased by more than 4% per annum, and this applies to new and existing tenancies.

The measure was introduced by Government in parts of the country where rents are highest and where households have the greatest difficulty finding affordable accommodation.

They are intended to moderate the rise in rents in these areas and create a stable and sustainable rental market that allows landlord and tenants to plan financially for their future.

This undoubtedly is a laudable aspiration, but unfortunately it is not working, for the simple reason that market forces, and in this case the lack of houses to rent in the Dundalk area, is at the root of the problem.

Recently a prospective tenant told of visiting two properties in town, and in each case there were in excess of twenty others seeking to rent the same property.

One of the properties, a modest terraced house, in poor condition, was on the market for €1,100 a month and the other the owner was seeking a rent of €1,300 a month for a three bedroomed semi-detached home.

In addition the owners of these houses were seeking deposits and references before they would contemplate renting.

In many cases it could be argued that a rent of €1,300 a month would be sufficient to service a mortgage, but the reality is that mortgage approval is very difficult to obtain, especially for those on fixed term contracts of employment, and not the permanent jobs that banks and building societies are seeking.

For those too on the margins of society, the unemployed or in many cases, newcomers to our shores, find it impossible to secure rented accommodation, and are offered only homes that are badly maintained, or in some cases, those seeking to rent feel that they are discriminated against because of their circumstances.

Of course not all landlords seek to exploit their tenants and many, especially those with multiple houses to rent, are paying high taxes, over 50% on their rental income, and get little allowance for their property when they have to repair after it is abused by indifferent tenants.

All of this adds up to a very unhealthy situation, both for tenants and landlords, with the obvious conclusion that it is difficult to see the situation improve in the immediate future for demand will always dictate and there is no sign of a slow down in the rental market.

More social housing would ease the demand, but there seems little prospect of Louth County Council being able to provide the volume of social housing needed to ease the demand in the rental market.