Licencing of landlords in short-term rental schemes
Dublin: The government is prepared to clamp down on property owners who make enormous profits by renting out their homes to tourists and international students. The law is coming as part of the government’s Housing for All scheme to stop the profiteers.
From 2019, a requirement for landlords to move to a short-term tenancy scheme in rent-pressure zones, where rent increases are limited to 4% per annum, is in place. But to make it more difficult, these regulations will be transferred to the Residential Tenancy Board (RTB).
Moreover, the government has also moved to make licencing mandatory for short-term rental schemes. Details are expected to be available in the coming weeks. Darragh O’Brien, Minister for Housing, disclosed that this licencing scheme had been effectively implemented in Lisbon, Portugal’s capital. Under the new system, landlords will not be able to offer short-term rental properties without planning permission.
The Airbnb company said that it welcomes the government’s efforts for new regulations. Globally, the firm has signed over a thousand regulatory and tax agreements. Therefore, the company spokesperson stated that discussions with the government will continue regarding this matter.
Public assessment that the housing shortage will be solved
It is widely believed that the introduction of short-term rental houses into the open market will help reduce the housing shortage. In Dublin alone, there are presently 1,500 houses in the short-term rental scheme, and while their reintroduction to the long-term rental market will not be a total solution to the difficulties, it would undoubtedly be a big comfort to renters.
The opinion is that the market will be adversely affected.
Many, however, fear that this will have a negative impact on the overall housing market. Estate agents point out that this kind of regulation will cause private investors to withdraw from the sector.
The influx of new investors into the rental market has been decreasing over the past ten years. Estate agent Marian Flanagan says the supply of rental properties is hurting.
According to the Central Bank and the Banking and Payments Federation, the number of buy-to-let mortgages has dropped by more than a third, from 1.50,000 to less than 95,000. Agents claim that measures to limit landlords in the short-term rental scheme are not bringing more properties to the market in pace with the country’s demand.
Let’s wait and see what the final verdict will be…
In addition to tourists, hundreds of international students visit Ireland’s cities in August and September. Although the tourists will return, the overseas students arriving during the same period are struggling to find accommodation. In this circumstance, property owners devise short-term rental schemes in order to earn a profit. When short-term facilities are provided instead of long-term tenants, there will be a situation where the rent will increase. These people are trying to take advantage of that. We’ll have to wait and see how successful the government’s efforts to stop them will be.
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