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Government moves to stop property investment companies buying up estates

Inside Politics: It is now estimated there will be as few as 12,000 house completions this year

Property investment companies are making mass-purchases in estates. Photograph: The Irish Times

During the course of the day yesterday, one issue dominated. It was the extraordinary phenomenon first reported in the Business Post on Sunday of global property investment companies buying up entire estates of houses in suburban areas.

We report this morning the Government is now going to try and block this practice.

Since Michael Noonan allowed the establishment of Real Estate Investor Trusts (Reits) when he was minister for finance, the vehicle has been controversial. Trusts have been set up in such a way that they end up paying no capital gains tax, no corporation tax and no tax on their rent rolls.

When the so-called vulture funds came in from abroad they came in at scale, buying up entire blocks of apartments in city centre locations - and then renting them out to the army of highly paid employees of social media companies like Google and Facebook.

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Then, following a change in planning laws, some became involved in student accommodation developments (co-living in practice) in all the major urban centres.

Politically, you could argue the toss for the apartments. The investors put up the cash to allow the developments to happen. It also suited the tenants, as they tended to be highly mobile. For many, Dublin would be a staging post for a few years before they moved on. Renting was the preferred option.

But now the big investment companies have begun to take over entire housing developments, in Maynooth (as the Post reported) and in Dublin 15 (as we reported on Tuesday). One company, Round Hill Capital, has been involved in a joint venture and acquired close to 250 houses in two new estates. These are family homes that it will rent out.

The political problems stemming from that are obvious. Already the lockdown has had a massively crushing effect on house completions. It’s now estimated there will be as few as 12,000 this year, nowhere near the 33,000 needed to keep pace with demand.

If the housing stock is already low, it’s not helped by investment companies coming in and purchasing hundreds of houses with the purpose of renting them out.

Politicians of all hues expressed sentiments ranging from alarm to outrage.

Amid the clamour, the most memorable speech came at the Fianna Fáil parliamentary party where Dublin South West TD John Lahart said the Government was "drowning in the shadows of Fine Gael housing policy". Here is Jack Horgan-Jones's report on that meeting.

You had the odd situation where Fine Gael TDS were also calling for the repeal of the Reits at their parliamentary party meeting.

The political reality for the Government is that once Covid recedes it will find itself back in the middle of a full-blown housing crisis.

Row breaks out over Troubles amnesty plan

There are times when you sense bilateral relations between Ireland and Britain have the same dynamic as those between the United States and Mexico when Donald Trump was in the White House.

The revelation last night that the British government is considering an amnesty for British soldiers accused of committing crimes during the Troubles is an act of provocation.

As Pat Leahy notes in his report on it, "a row between Irish and British governments is likely to erupt Thursday".

The news was leaked to British newspapers and is as flagrant and hostile as Boris Johnson sending two gunboats to Jersey to see off a French fishing blockade of the Channel Island over post-Brexit fishing rights.

There are few at this stage who don’t realise that Boris Johnson is one of those British prime ministers that does not care a jot about Ireland or this State, certainly less than Margaret Thatcher and less even than Theresa May, and that’s saying something.

His latest surge of patriotism might have something to do with the forthcoming local elections in England and those in Scotland.

As Pat notes, the British northern secretary, Brandon Lewis, visited Ireland on Wednesday and met Minister for Foreign Affairs Simon Coveney, but it was unclear if the issue was discussed.

It seems to be a unilateral decision by the British, and if the move proceeds as reported, it would be a violation of the 2014 Stormont agreement.

With Edwin Poots the favourite to win the DUP leadership, and intent on a campaign to banjax the Northern protocol, there will be question marks over the workings of the Belfast Agreement, particularly the future of North-South Ministerial relations.

After two years, there will be an intergovernmental conference, which at least is a positive development.

Still, it’s been a grim few weeks for the politics of the two islands - with no sign it will be less grim in the weeks and months ahead.

Quote of the Day

“This decision marks a moment of immense moral significance in international policy, putting global need ahead of any narrow considerations.

“It has the potential to be exemplary, building hope in so many areas for a real new beginning in our mutual interdependence.”

– The response of President Michael D Higgins to the US government’s decision to waive intellectual property protections for Covid-19 vaccines.

Best Reads

Miriam Lord provides a great overview on the reaction in the Oireachtas to the latest housing controversy.

Newton Emerson says similar bulk buying of houses is happening in the North and argues that tenants need a right to buy.

Jennifer Whitmore of the Social Democrats argues against the Canada-Europe Trade deal in this opinion piece.

Playbook

In the Dáil, a second-stage debate on the Climate Action Bill continues. The Private Security Services Bill and the Sale of Tickets Bill (to prevent ticket touting) are also being debated.

Minister for Health Stephen Donnelly will be in the chamber in the afternoon to discuss Covid-19 and the vaccine rollout.

The Social Democrats have tabled a Private Members’ Bill that would prevent certain types of leasing in the provision of social housing.

At committees, Minister for Finance Paschal Donohoe will be at the Finance Committee to discuss the Consumer Credit (Amendment) Bill 2018. Minister for Agriculture Charlie McConalogue will be going through the revised estimates for his department in front of the Agriculture Committee.