Rates hikes forced 21,000 landlords to sell up in 2022
RISING interest rates are driving landlords from the market, who are seeing less of a return on their investments.
A succession of hikes from the European Central Bank (ECB) aimed at taming inflation have seen interest rates rise by three percentage points since July, with even more increases planned in the coming months.
Estate agents Sherry Fitzgerald said the issue is exacerbating the exodus of landlords from the rental market.
Recent research by the firm has shown 21,000 landlords left the market last year and managing director Marian Finnegan says the problem is getting worse.
‘They’re selling up for ten years. Ten years ago there were two landlords for every one investor in the marketplace. Last year we reached a point where 37% of our vendors were landlords leaving the market.
‘So what that means in numbers is that over 21,000 landlords left the market last year,’ she told RTÉ’s Morning Ireland.
Asked if rising interest rates will also spur many landlords to sell up, she replied: ‘100%, 100%’.
‘As the interest rate goes up, the cost to landlord increases, the returns and the viability investment goes down’ she said.
‘The situation is not going to improve unless something is done but it needs to be done this month not in six months’ time.’
Ms Finnegan said the Government had failed to do enough to address this before deciding to lift the ban this week.
Amid heavy criticism from the Opposition and homeless charities, Taoiseach Leo Varadkar defended the move yesterday.
He told the Dáil that a false narrative that pits landlords against renters is exacerbating Ireland’s homelessness problems.
Mr Varadkar said the ‘demonisation’ of landlords had to stop.
He said: ‘I think one of the errors that is easily made in prescribing solutions to the housing crisis is only looking at one aspect of it and not seeing how everything is interlinked, and how one action here can actually make things worse there and that’s something we have to give consideration to.
He added: ‘I do think that there has been a demonisation of landlords by our political system and by wider society over the past number of years. That hasn’t worked.
‘In fact, it’s caused harm. It’s made fewer properties available, it’s really hurting people, particularly those who need to rent for the first time, young people, new arrivals in the country, and people who need to move who aren’t protected by the rent pressure zones.’