Mr. Patrick Davitt:

I am delighted to be here with Oireachtas Members today. I will first talk about rent pressure zones, which are creating a two-tier rental market. The maintenance of quality accommodation is not economically justifiable where RPZ rules apply. The capital value of properties subject to the RPZ rules are dropping because many properties are rented at well under market rent and when landlords sell these properties, they have to sell them at investment value and, hence, must right down the value of the properties. Properties of non-institutional landlords who leave the market are often replaced by new properties at much higher rents that are owned by institutional landlords. The constantly changing and very challenging regulatory environment, as well as the drastically unequal taxation treatment of such landlords by comparison with other landlords, is a real factor in the marketplace. On the latter point, there has been such a high level of interference in the market that some landlords are now holding properties out of the market. New legislation of June this year, which increases the notice periods for termination, will further hasten the exit of small landlords.

Another point I would like to make is how decisions are being made on the back of seriously incomplete data. Every time there is a new Daft or Myhome report on the rental sector, we hear there are only a limited number of properties available to rent. This is very concerning to us because neither portal can tell anyone how many properties are in the rental market overall on any given day of the week. They can only measure what is on their portals, and this is nowhere near the complete picture.

On the subject of portals, I wish to talk about the RTB 360 portal. Some Deputies may have received correspondence on this from their constituents. It is another portal that is causing a major problem for landlords and their agents. The RTB 360 portal was launched in November 2021 and it is simply not fit for purpose. No prior discussion took place with those who use it. It was not tested by a single agent or landlord before it went live. On 4 April 2022, new legislation came into effect requiring landlords to register each of their tenancies with the RTB every year. This must be completed within one month of the anniversary of when the tenancy began. A four-month transition period was provided for tenancies which have renewal anniversaries between 4 April and 3 July 2022. This transition period ended on 3 August 2022. A massive portion of attempted registrations on this portal are unsuccessful. When such systems are introduced, the norm is that the old one can be referenced when needed and relevant data retrieved. That is not the case with this one, however. The old system disappeared overnight. No one can access their previous data, some of which was built up over the previous 17 years. The cost of this to agents is huge in downtime; extra resources are needed and there are costs in staff time in attempting to deal with a system that is not functioning. I would safely say that even someone with a technology degree could not master it. Morale in estate agents' offices is seriously impacted and many agents are seriously considering their future in the rental market, given the excessive costs of doing business with the RTB. Agents now face the threat of late registration fees, despite the fact that the issues are not of their making. The failures are so widespread and extensive, which they have now endured for so long, that we believe it is time for the RTB to scrap the system and build a new one, despite its cost of €7 million. Bad technology on day one is simply bad technology, and given the failure of all attempts to fix to date, it will likely never be corrected, not to mention the cost to the State.

In fairness to the CEO of the RTB and his staff, they are doing a great job in attempting to turn a sow’s ear into a silk purse. I imagine they are overwhelmed with emails, letters, telephone calls and complaints, yet they remain helpful and pleasant. The IPAV has tried to help. We got the RTB to agree to a working group and RTB staff visited agents’ offices to see the problems for themselves but to no avail. The system is still dysfunctional. Regardless of the chaos of this system, the Department of Housing, Local Government and Heritage has insisted on the annual renewal date for all registrations. The law must be amended immediately to change the renewal date until a functioning system is in place. In fairness to the RTB, it has decided to refund all payments and penalties, which is a huge problem in itself and adds to its workload. I call on the Minister for Housing, Local Government and Heritage to immediately intervene and provide whatever finance or resources are necessary to fix the problem, even if it means the complete withdrawal of the system. We are of the view that a new portal is needed, one that is properly tested by agents, landlords and other users before it goes live.

Over four years ago, IPAV members were reporting a new trend emerging of small private landlords leaving the market. To get some sense of how prevalent this was, we decided to do a survey of our members who reported that what we were hearing was, indeed, accurate. In July 2018, we published data on this worrying trend. This publication was greeted with a fair degree of scepticism and some derisory commentary. There was disbelief that small landlords, at a time when rents were so high, would even consider leaving the market. I have a post from an agent in Cork that was published on LinkedIn a number of days ago. It is the story of where we are at the moment in the marketplace. It simply states:

Feeling sad today. Given notice of termination to a lovely tenant and family. The landlord’s mortgage repayments are up €300 per month (1.25%). Rent can only be increased by €25 as the property is in a rent pressure zone. The rent for this home is at 60% below the open market, or the market value of property in the area. 60%. And the tenant would gladly pay more money for this property and will be paying more in their next property, but landlords and tenants are losing out due to the rental regulations in the RPZs that are not working. Rent pressure zones are many years in operation and are only making the rental market more dysfunctional. When are we going to cop on and admit that this experiment is not working?