I don’t envy landlords, but I don’t feel sorry for them either. I don’t want to be one, but I certainly haven’t enjoyed being at the mercy of several dodgy ones over the years.
What I want is a freehold cottage in the woods with an aesthetic that suggests I place the odd hex on the local townspeople if they deliver any junk mail. But wizened crone accommodation is not financed readily by banks, so for now I’m still in the conventional real estate market, and have been following the eviction ban debate and the interesting choice of language it has thrown up.
I’ve enjoyed “class warfare” being bandied about, with the ban trussed up as a strike against landlords and the middle class as a whole, as if the peasants were revolting and brandishing pitchforks to claim back their land and scratch “up yours” into people’s Range Rovers. But no one has yet stormed the Sheridan’s cheese counter, and people still feel safe wearing padded gilets on the streets without becoming a target for mob violence.
Then there’s the eviction ban being sold as the reason landlords are exiting the market, ignoring the fact that prices rocketing in the last few years means it’s an optimal time for landlords to cash out on their investments before prices drop and rising interest rates bite. Traditionally, buy-to-let loans balanced out the higher deposits required of would-be landlords by allowing them sweet little periods of interest-only repayments. That doesn’t look so shiny when interest rates are climbing and no one knows when they’ll stop.
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Also, not every landlord keeps their properties forever; most see it as a way to invest in an asset while hopefully getting a tenant to pay it off for them with a bit left over. Then they wait for the value of the property to go up enough to make a tidy profit to sell.
In an ideal situation, landlords make some money and renters have a place to live and no one gets screwed over. But that doesn’t always happen. There are bad landlords and good tenants. There are landlords who don’t raise the rent on struggling families and who will come over in the middle of night to fix a leak. There are tenants who don’t pay rent and have games of hurling in the hallway.
After renting for a decade across three continents, I like to think I’ve seen it all. I had a landlord who tried to get me to sign a lease agreeing not to leave my bedroom window open in case it rained and the water damaged the floorboards. This was on the top floor of an old house with no air conditioning in a 40-degree summer in Sydney.
When a garbage truck ran into the house, taking out a support beam for the 380-degree balcony (where we used to sleep under mosquito nets on stifling nights), she didn’t get it fixed. She put up a wonky pole and some red caution tape, throwing structural integrity and caution to the wind.
On the flip side, at university I saw people use a bathtub as a bobsleigh down a handmade jump off the roof of a rented house.
We’ve seen articles recently quoting landlords talking about climbing interest rates and how their rental incomes might soon fall short of mortgage repayments when factoring in tax.
Yes, it is harder for landlords than it was a few years ago. While I don’t get a kick out of seeing anyone in financial pain, it seems some have forgotten that investing in property is still an investment, and investing comes with risk. Landlords are not owed profit because they bet on the housing market instead of the stock market.
There were a few years of record high rents and low interest rates, but there was no guarantee they would last. “Safe as houses” doesn’t mean you won’t be subject to rent and rates fluctuation, or new government legislation.
The Government is focused on how measures like overturning the eviction ban might encourage landlords to stay or enter the market. Weirdly enough, they haven’t suggested their own hip pocket take a hit by reducing the huge tax on landlord profits.
In Australia, landlords are incentivised to rent their houses for less than their mortgage payments, because the shortfall is deducted from tax they might have to pay in their day job. The so-called “negative gearing” system has its flaws – it favours high-income earners, makes it harder for first-time buyers and apparently cost the government $18 billion (€11.2 billion) last year in potential tax revenue. But even when the rental market was tight in Sydney, I was always able to find a nice place I could afford to live in.
Could the Irish Government ease the pain on landlords by introducing measures like negative gearing? Sure. But it also doesn’t owe landlords a living. No one does.