Half of Ireland’s tenants spend more than 30 per cent of their take-home pay on rent, while 12 per cent spend more than half their income on keeping a roof over their head, according to new research.
The survey from the Residential Tenancies Board (RTB) also suggests that moves by small landlords to exit the rental market over the next five years will impact on supply and see average rents accelerate even more quickly.
Affordability is a central issue in the report published on Wednesday, with rent levels often seen as out of tenants’ control and not linked to income.
Tenants are paying on average 36 per cent of their net income on rent, with half spending more than 30 per cent of their take-home pay on rent, climbing to 64 per cent in the greater Dublin area.
When speaking to researchers, tenants outlined multiple reasons for renting including easy access to work and school and because they were unsure where they wanted to live in the long term.
However, one in five said they were renting because they could not get a mortgage, with a further 15 per cent saying they were renting while saving a deposit for their own home. A significant percentage of those polled believe Central Bank rules on mortgage lending make it more difficult for them to buy their own homes.
The report is one of the largest studies ever undertaken of the rental sector in Ireland and suggests there is "no real evidence of the stereotypical conflicts" with both landlords and tenants largely happy with their respective relationships.
All told, 79 per cent of tenants described their experience renting in the private sector as either positive or very positive, while 88 per cent of small landlords rated their experience with their tenants as “positive” or “very positive”.
While most small landlords appear set to remain in the market for the foreseeable future, their contribution will decline as the market changes, the report says, with 26 per cent of small landlords planning to sell a rental property in the next five years.
On the other end of the spectrum, large landlords have clear intentions to expand their portfolios, which suggests that the profile of landlords is set to change.
“It’s worth noting that the RTB’s tenancy registration data shows us that small landlords who own one to two properties make up about 86 per cent of all landlords and supply an estimated 53 per cent of the private tenancies in the rental sector,” said RTB interim director Pádraig McGoldrick.
He added that with 26 per cent of small landlords “indicating an intention to sell a property within the next five years there is potential for increased pressures on supply and rent levels during this period”.
The private rented sector has undergone massive change since the RTB was established in 2004, the number of private tenancies registered with it climbing from 83,983 to a total of 319,822 active tenancies at the end of 2016 before falling back to 297,837 by the end of 2020.
This reduction is also seen in the number of private landlords associated with private tenancies, falling from a high of 175,250 in 2016 to 165,736 by the end of 2020.
The survey suggests 34 per cent of renters expect to be owner occupiers within five years, with 36 per cent saying they believed they would still be renting in 10 years.
Meanwhile, 9 per cent said they were currently on the waiting list for a local-authority or approved housing body home, while 19 per cent of tenants are receiving rental assistance.
When asked what they did not like about renting, security of tenure featured prominently, with respondents saying there was always a “nagging doubt that the tenancy could come to an end and they will be back at square one”.
The report brings together the findings of several surveys including 1,038 face-to-face surveys with tenants and 500 telephone surveys with landlords carried out last year and further in-depth interviews since.