Death of the bedsit
Opinion:Regulations to improve flats will be the final straw for many landlords, and will lead to a fall off in available rental accommodation
The introduction this month of the latest housing regulations has forced some bedsit landlords to close up shop and put their Pre'63 houses on the market.
Many will argue that higher standards are necessary in order to ensure a satisfactory minimum standard.
However without any scheme in place to incentivise landlords to tackle these costly projects and given the current scarcity of credit, there remains only a slim chance that any substantial works will be undertaken.
The economy would have welcomed the additional spend brought about by enlarging and upgrading smaller apartments - there may even have been a few jobs for some of the unemployed. The timing is hardly smart either given that many landlords now, on a monthly basis, face the stark choice of paying their mortgage or their taxes - because they simply can't pay both.
Few businesses have managed to escape the ravages of the recession, but fewer still have been singled out to bear the brunt of an avalanche of taxes, levies and regulations like the buy-to-let sector.
Not that this Government can be blamed for it all. The broadside began with the Fianna Fáil-Green coalition cutting a huge 25 per cent of mortgage interest relief for landlords. This measure has pushed many landlords over the edge and is cited by industry observers as the major contributory factor in the mortgage arrears crisis, estimated at 18 per cent of mortgages in the buy-to-let sector.
Business owners in all other sectors can offset operating costs before net profit is calculated. It is entirely wrong that similar rules do not apply to the buy-to-let sector. It is incredible that a government would act so recklessly as to grossly discriminate against and damage a sector that was already left reeling from plummeting capital values and massive mortgage debt.
There have been other nasty tricks played on the sector. Remember the forced rent reductions brought about by the Department of Social Protection cutting tenants' rent allowance while advising them to pass on the reduction to the landlord - as if the landlord could do likewise with the bank. The NPPR - second home charge and the Household Charge are two more violations - arbitrarily applied per flat rather than per house. Then there was the PRTB ( Private Residential Tenancies Board) - forced upon the sector with a promise that it would offer an efficient landlord-tenant dispute resolution mechanism. It didn't do anything of the sort and landlords are now livid that they have been forced to fund the creation of an inefficient Government quango whose greatest aptitude seems to be in the collection of a €90 fee each time a flat is let.
The new regulations won't improve the stock of flats and bedsits. They will simply reduce the volume of available flats and bedsits with a consequent pressure on rents. Its strangely ironic that the people who were expected to gain most from the higher standards are the very ones who are now likely to have to search harder and pay more for their accommodation.
Coleman Connor is a chartered surveyor and a director of O'Connor Shannon Estate Agents in Rathmines, Dublin 6