Are landlords really exiting rental market in their droves?
Cantillon: Lobby group conflates issues in taking aim at institutional landlords
Ipav suggests its survey demonstrates that landlords are leaving the rental market in their droves. Photograph: iStock
“Private landlords are leaving the market in their droves” was the message from the Institute of Professional Auctioneers and Valuers (Ipav) yesterday, which claimed that for every two landlords leaving the private rental market, only one takes their place.
While that may be the case, Ipav’s data doesn’t provide compelling evidence that landlords are in fact leaving the market in their droves.
For a start, its membership of 1,200 didn’t all take part in the survey – just over 90 auctioneers did, or 7.5 per cent.
That’s shaky ground on which to base on argument that landlords are deserting the market
From that sample it found that in the past 12 months 1,022 landlords have sold investment properties, while 452 have bought such properties.
That’s shaky ground on which to base on argument that landlords are deserting the market.
More than 53,000 property transactions took place last year. Assuming the number of landlords Ipav refers to have one property each, they make up a small fraction of that transaction figure. Ipav’s membership is predominantly smaller companies, although it does have some large groups in Dublin.
So, on the assumption of one property per landlord, Ipav’s sample represents just under 2 per cent of total transactions. If we assume each landlord has two properties, that rises to 3.8 per cent, three and the percentage rises to 5.7 per cent.
Ipav doesn’t know how many properties that includes, so if we do assume it’s on the upper end of the scale, it’s still a drop in the ocean of total transactions.
The lobby group went on to suggest that this would ultimately lead to a scenario where institutional landlords have control over Ireland’s market as small landlords deserted the market.
Again, while that may happen, Ipav hasn’t gathered the data to back up the claim.
Conflating a number of issues in the property market – of which there are many – does its members no favours, especially when Ipav’s claims aren’t particularly well grounded.