A policy document presented at yesterday's Cabinet meeting has proposed an overhaul of Ireland's rental market - longer leases and bigger tax incentives for landlords are among the recommendations.
The National Economic and Social Council (NESC) report begins by saying that it welcomes recent advances in Government housing policy - including the Government's recognition that between one quarter and one third of the Irish population will find it very difficult to ever own a home.
It is now estimated that one-in-five households (305,000) are renting.
The Government has identified affordability, sustainability and inclusion as the main goals of its housing policy.
The paper calls for a "breaking free of the current debate" which it describes as a "dualist" conversation dominated by some calling for rent controls - and others saying that new incentives are needed to keep existing landlords in the sector, and to encourage developers and investors to put money into supplying more properties.
It says that we need a "multi-faceted approach" based on occupant security and incentives for landlords.
The proposals include "Controlled incentives" for landlords - subject to them satisfying property standards and terms.
It also calls for an increased focus on long leases which would last up to 10 or 20 years to reflect growth in the number of long-term renters. Present legislation entitles Irish tenants to maximum leases of four years and nine months.
The NESC calls for a break away from crude "price freeze" rent controls - and endorses the use of secure occupancy regulations and supply-side incentives to influence the market.
Dr. O’Donnell, Director of NESC, commented on the report: "Government policy has set affordability as the first goal of housing policy: this is potentially transformative. Taking up the affordability challenge in rental requires a commitment to an integrated approach."
He continues: "Such a strategy can be more than the sum of its various parts—rent certainty, secure occupancy, tax treatment and others. It is this synergy that will transform the sector."
Rent-crunch
Average rents nationwide between January and March stood at just over €960 - that is 8.2 percent higher than at the same point last year.
Compared to their lowest point (2010 in Dublin and 2012 in the commuter counties), rents have now risen by one-third in the capital and a quarter in the surrounding areas.
Carol Tallon, author of the Irish Property Buyers Handbook joined The Pat Kenny Show in February to discuss recent changes in the property market and the effect of the Central Bank's new mortgage regulations and how they could lead to a broader shift towards long-term renting.
She predicts that age profile of Ireland's first-time buyers is set to change from the old norm of people buying in their late 20s - to a new situation where people will be closer to 40 when they get on the property ladder.
