Tenant power on the rise as landlord's market wanes

The rise of tenant power during 2004 is a positive development in many ways but tenants are becoming "a bit impossible in their demands", according to Joan Fogarty of Lisney's lettings department.

The landlord's market began to wane two years ago when mortgage interest relief was re-introduced in the Budget and the number of rental properties escalated.

The feedback from letting agents is that the current glut of rental accommodation has meant landlords now have to entice tenants by meeting their demands and keeping the rent at a realistic level. Once in, tenants will expect the property to be maintained and repairs to be attended to immediately. If the landlord doesn't play ball, there is always the option to go elsewhere.

This trend reverberates through all levels of the market. At the corporate end, rents at the €3,000 upwards level have softened. "There's a lot of choice and tenants are able to bargain more and negotiate extra perks. Company budgets are lower and they are expecting more, like the linen to be supplied and are not paying any extra. Landlords will agree to this for the sake of getting the let."

Even at the middle (€1,300-€2,500)and lower ends (up to €1,300) of the market, microwaves, dishwashers, washer dryers and power showers are now expected as standard. Many professionals won't consider taking a property if they don't have their own en suite bathroom and the furniture is anything less than new and contemporary.

Gráinne O'Connell of Christies, which deals mostly in the Dublin 2, 4 and 6 market, says these areas are stable, although rents have dropped over the last two years. "This has meant that more people can afford to live there, and some areas on the periphery have suffered as a result."

Her agency used to "dabble" in outlying areas but now stick to the locations that are more easily lettable. "Dublin 4 is buoyant if adequately marketed and valued.The stuff that is going quickly are one-beds from €850-€1,000, two-beds from €1,000-€1,500 and three-beds from €1,500-€1,700 which fly out the door. As a general rule landlords let properties quickly if they listen to our advice."

With regard to the corporate market she says there are good enquiries "but a not huge volume of them. Anyone on a large budget will go to every agent and every property available before making up their mind." She says that tenants can sometimes be unreasonable "but they are generally just aware that they can ask for things and expect decent accommodation. They won't accept a fridge that has the ice box door sellotaped on , whereas two years ago they wouldn't have bothered the landlord about it, in case they might get rid of them."

Joan Fogarty says that rents at the middle and lower ends of the market are starting to level out.

While parts of the city centre like the IFSC are holding their own - although these have seen a slight dip in rents during the year - outer suburban areas have experienced a softening during 2004. In most areas, however, landlords are less likely to raise the rent if they have good tenants, so brand new properties are fetching a higher rent.

West Dublin has suffered as it no longer has the same influx of IT professionals looking for accommodation in the area. "There is such a volume of houses being built in some areas that tenants can go to see up see up to five places before they make a decision." says Fogarty.

Gráinne O'Connell says that areas like Loughlinstown and Shankill have also been hit, although she sees Dundrum as a rising market. With the Luas, and an awful lot of new apartments coming on stream, we can see rents rising from €1,000-€1,100, to €1,200-€1,250.

Some outlying areas are dependent on the social welfare market for rental demand. While during the landlord's market, social welfare tenants were often forced into substandard accommodation, they are now as discerning as professionals when it comes to expecting good accommodation.

Joan Fogarty says that with investors lying low at the moment there are few second-hand properties on her books , the majority being new build. The Residential Tenancies Act 2004 has made landlords "a bit nervous". "They feel they are not as in control. While any landlord that lets through us would be paying their taxes, they feel a bit intimidated, as if someone is looking over their shoulder. The landlord registration forms are a bit instrusive perhaps."

Gráinne O'Connell says that while landlords are a bit nervous, she believes it is ultimately " a good thing for them. It is going to protect them as well. Before if a tenant left their property without paying or the place was wrecked they had no recourse except through the courts, which was time consuming and costly."

She says the current reluctance among investors to buy more properties is based on a misconception that properties are not letting. "This is just scaremongering; if it's well managed, clean and fresh and regularly updated and in a good location there shouldn't a problem."

Carina Warner of Hooke and MacDonald's lettings department says that the city centre and areas surrounding it - including Dublin 3, 4, 6 and 8 - continue to perform well.

One of winners has been Grand Canal Dock where landlords can command €1,300 upwards for two-bedroom apartments.A surprise hit was the Island development in Chapelizod where one-beds currently let at €900. The reason, she believes, is that the area is accessible to the city centre and has few new developments.