Incentivising landlords

THIS week the Government increased the number of Rent Control Zones to include Maynooth in Kildare and Cobh, Co Cork, two popular commuter towns for Dublin and Cork cities. According to the Minister, “57pc (186,000) of tenancies nationally are now located in Rents Control Zones”. While this will provide some certainty initially for tenants in these locations, the ramifications may be less beneficial for the market in the medium term as investors look elsewhere for returns which are determined by natural market forces.

If we’re to believe the rumours, the Government is currently giving serious consideration to introducing incentives to attract landlords back into the residential investment market. Not before time. The incentives anticipated are in the areas of the reintroduction of 100pc tax relief and the abolition of Residential Property Tax for landlords. These moves are necessary now. Some believe though that the result will be higher prices. I disagree. Once access to credit remains controlled, and the Central Bank seem committed to this, then the danger of the market overheating remains limited.

The Government’s progress in the delivery of ‘rapid build homes’ only highlights the fact that the housing shortfall will be solved much more efficiently by the private sector. One only has to look at the recent announcement that three of the five developments of modular homes currently under construction are running behind schedule. Some homeless people will remain in hotel accommodation beyond the target date of July, despite emphatic promises by the Minister to the contrary. I wonder who will be held accountable?

Finally, we are seeing the Government address the core issue — lack of supply.