Farewell to the humble bedsit
Tighter regulation of rental properties may force many landlords to sell up, writes JOANNA ROBERTS
When the humble bedsit is consigned to history on Friday next, 2013 thanks to regulations setting out minimum standards for sanitation and heating in rented accommodation, the landscape of the Irish property market – particularly in Dublin– is set to change. The ban on shared bathrooms and landlord-controlled heating means many properties may not be rented out without significant upgrades, and a number of multi-occupancy properties may hit the market as landlords struggle to meet the cost of compliance.
“There are two issues for landlords: planning permission and cost,” says Margaret McCormick, information officer with the Irish Property Owners’ Association. “A number of houses aren’t suitable for the integration of bathrooms into the units, and people can’t get credit from the banks.”
Although the Housing (Standards for Rented Houses) Regulations 2008 have been in effect since 2009, there has been a four-year grace period for the implementation of articles 6, 7 and 8, which concern sanitation, heating and food preparation and storage. From February, all dwellings available for rent, including those within multi-unit properties, will be required to have their own bathrooms, independently-controlled heating appliances, a four-ring hob, oven, grill and extractor fan, a fridge and freezer, a microwave oven and access to laundry facilities.
Enforcement will be carried out as part of existing local authority inspections, starting in spring 2013. Where properties do not comply, landlords will receive an improvement notice requiring them to bring the property up to standard. Should this not happen, a prohibition notice may be served to prevent the landlord from re-letting the premises.
Because most modern-built accommodation will already meet the required standards, it is older properties that will be most affected, specifically pre-1963 buildings that have been divided into bedsits. Landlords are faced with three options: to upgrade the property to the required standard, leave it vacant or sell up.
An impact assessment of the regulations carried out by the now-defunct Centre for Housing Research in 2008 estimated that the cost of upgrading an eight-bed pre-1963 house into a six-bed unit with individual bathrooms and heating could be €120,000.
“For some landlords the timing could not be worse,” says Michael Walsh, partner and head of property with ByrneWallace. “In theory one should be able to borrow against future rental value but in the current market the commodity in scarcest supply is capital. Not every landlord will have the capacity or appetite to take on the necessary work, even though it ultimately should add to the value of the premises.”
He says landlords who do choose to sell may find an appetite for multi-unit properties among families who want to convert them back to single-occupancy houses. But he warns anybody considering buying such a property to be aware of the regulations and make sure the cost of any work is factored into the buying price.
Sherry Fitzgerald say they have not yet seen evidence of a huge influx of such properties on to the market. However, there is some indication that conversions are already taking place.
The 2006 census recorded 8,751 bedsits in the country; by 2011 this number had fallen to 5,695, the vast majority in central Dublin.