Rents Level Rising
25 September 2013 – Newsletter
For a variety of reasons, including the lack of building in recent years, new housing regulations in regard to multi units and the influx of students seeking accommodation, there is currently a significant property shortage in Dublin and rents have increased as a consequence and substantially in some areas. However, as a result of two recent developments, they may set to rise even further:-
INCREASES TO RENT SUPPLEMENT
Revised rents limits under the Rent Supplement Scheme came into effect on Monday 17th December 2014 when they will be reviewed again.
The current review establishes new maximum rent limits payable by the Department of Social Welfare which is in line with the most up to date data available. This data has been compiled using information received from the PRTB and as far as we know this is the first time data compiled by the PRTB has been used by the Department in determining rent supplement levels. We feel this is a significant indication of where the rental market is heading. Although some landlords prefer not to deal with Social Welfare tenants, these new rates serve to effectively act as a floor in the market. This tells us that not only the PRTB but also the Department of Social Welfare anticipates growth in rental levels in the near future. June 2013 and will be in place until
College students regularly complain about the lack of accommodation for the academic year but this year has been particularly brutal and many seeking an apartment, house, flat or bedsit have been bitterly disappointed.
The latter accommodation is usually located in the traditional “flatland” of Rathmines, Ranelagh, Phibsboro and Cabra but this year a large chunk of accommodation previously available will no longer exist, i.e. the traditional bedsit/flat in a multi unit house as in the last year, DCC have inspected 1500 flats in the above areas and found that 1400 did not meet the minimum legal standards for private rental accommodation. As a consequence, a large number of these multi unit properties have been put up for sale or closed down for renovations.
…SO… IS NOW THE TIME TO INVEST IN PROPERTY AGAIN?!
In view of the above developments and as a consequence of the general shortage of properties for sale and rent, it stands to reason that there is only one way property prices can travel in the decade ahead and if capital values are set to rise over the long term, what about rents? This is good news for property investors in the short, medium and long-term, but certainly not for those who wish to rent. However, the shortage may also put pressure on banks to finally start to release badly needed funds and mortgage finance so even renters may ultimately benefit.