Nowhere are the stark choices facing the Government on housing clearer than in the rental market. Move too far to please landlords and tenants feel exposed. Move too far to protect tenants and investors stop building. All the while, lives are blighted by a lack of affordable rental properties and – for those lucky enough to get a lease – the difficulty of moving on to own a home due to the wider crisis in the housing market.
A report by Threshold shows that, compared to Northern Ireland, renters in this State have higher incomes and many remain in rental properties for longer. While there may be a range of factors at play here, the fundamental one is the high price of rental and the lack of supply to buy.
This Government and its predecessor have made a number of interventions in the market. The results have been mixed. Rent pressure zones have given some protection to existing tenants. But the detail of the rules has led to a fall-off in investment in apartments. This has disadvantaged new tenants and led to a rising gap between rents for those who have a lease and rents on offer to those looking for one.
Increased public investment has also been made to try to encourage building, some of it in cost-rental properties which offer rents at below market rates. But this takes time to deliver.
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The latest Cabinet decision to allow rent levels to be revised between tenancies is an attempt to restrike the balance and thus encourage investment. Six-year tenancies are to be mandated and no fault evictions ended, except for landlords with three properties or less.
The proposals led to a split at the Housing Committee and a minority report from Opposition parties calling for the legislation not to go ahead. However, it is clear that the current approach has not been working, with signs of a big fall-off in apartment building and also some smaller private landlords leaving the market.
In trying to strike an impossible balance, the Government is banking on one thing. It is that its plans to accelerate apartment building bear fruit. If they do, then increased supply should help the market and start to hold down rent increases. If not, then rental costs will continue to rise, as will the political pressure on the Coalition.
The strategy also only works if there is a general rise in housing supply. This would help people move on from existing rental properties, thus freeing them up. The Government, in introducing these new measures – and investing billions in housing annually– is betting that additional supply will follow. The 2025 home completion figures, due on Thursday , are not likely to be encouraging. But some analysts see more positive signs for this year and next. The Government will fervently hope that their analysis is correct. It is no exaggeration to say its prospects are relying on it.
