Mr. Stephen Faughnan:

I thank the committee for the opportunity to make the presentation and wish it well in the difficult task it has been given in a time of turmoil in the housing sector and in regard to homelessness.

The Irish Property Owners Association, IPOA, is the representative body for landlords in the private rented sector. We will give our help to, and co-operate with, the work of the committee. Our written submission outlines our views on the need for change to take place, with the help of the Government and with the co-operation of local authorities and landlords on the ground. It is high time the State extended the hand of friendship to the providers of private rented accommodation. The Government must not forget the importance of maximising home ownership. When a house is purchased, there is a mortgage on it for a period, and when it is paid off, the owner has a roof over his or her head. When people are tenants, they rent all their lives and they may have a dependence on the State in times to come.

I am joined by my colleagues from the IPOA national committee, Tom O'Brien and Cathal Lawlor, and our information officer, Margaret McCormick. The IPOA was formed in 1993 as a non-profit organisation limited by guarantee and it has been at the coalface of legislation, compliance and so on for years. For example, we sat on the private residential tenancies commission in 1999 and participated in its report of 2000, we were on the ad hocboard of the Private Residential Tenancies Board, now the Residential Tenancies Board, and we have served on various elements of the Residential Tenancies Board. We are committed to standards of accommodation and have made submissions to most of the reports published in the sector, as well as educating our members on legislation, compliance, banking difficulties, of which there are many, and disputes.

Landlords are not the most popular sector of society but they are a vital part of the solution and yet they are constantly being levied with legislation compliance far beyond what is necessary, all to the detriment of the supply and cost of rented accommodation. It is notable that we house 700,000 people in quality rented accommodation and while there are some exceptions, the majority of this accommodation is affordable, or has been affordable.

I will give a summary of our recommendations. We require the urgent revision of Central Bank lending rules, which would make the position more accessible for investors coming back into the market or extending their remit in the sector. We recommend real action on excessively high mortgage interest rates, given landlords are paying 4% to 4.5% on mortgages while institutions are borrowing the money at 1% or less. We need action to close that gap in order to give landlords a more realistic return on their investments. We need mortgage interest relief to be restored to 100%, given ours is the only sector in Irish society that has seen reduction in the rate of relief, which is in comparison to the commercial sector and all others, who receive 100% relief. We need that restored because it is not fair that we should be paying tax on a loss, which is the case in many current circumstances. In addition, legitimate expenses need to be allowed fully. Overall, it is a necessity that the law is amended to reflect the fact the buy-to-let sector is a business. We have been looking for this change for a long time and it has not come forward, so it is high time this is addressed.

Consideration should be given to the reintroduction of targeted capital allowance schemes for investment in appropriate, quality housing in areas of high demand. An example of a targeted area in the constituency of some of the Deputies present is the North Circular Road from Hanlon's Corner, as it is known, to Phoenix Park. This is an area with a high density of converted properties of good quality houses and yet 11 of these houses, which could accommodate some 200 people, are boarded up. We want to progress this in conjunction with the local authority, as we have discussed with previous Ministers, but it needs to activated to proceed. The rest of the North Circular Road is less hit in this sense, but it is hit nonetheless, and there are many properties which are not boarded up but which are out of use. A targeted capital allowance scheme in this type of area, not only in Dublin but throughout the country, would be a very important element of our requirement.

We need to reduce and simplify existing legislation in the sector, given that such legislation was brought in on a whim in many cases. Rather than legislating property owners out of business, we need to legislate for them to be in business and to satisfy the demand among tenants for affordable and comfortable accommodation.

Bedsits should be allowed. According to current standards and legislation concerning rented accommodation, bedsits, which are one-bedroom units that do not have bathroom facilities within the unit, are no longer fit for occupation. We demand that this be reversed, certainly for the moment but also for the foreseeable future. Many of the houses on the North Circular Road are closed down because of these regulations. We need to get those back on board, get people housed and get the properties filled and working.

The HAP and rent supplement schemes need to be reviewed. Rent supplement has traditionally been paid directly to the tenant - the person who qualifies for the supplement - with the idea that he or she then pays it to the landlord. This arrangement has fallen through in quite a lot of situations, so we have been constantly demanding that these payments be made directly to the landlord's bank account because if rent is not paid, it causes a great deal of bother and disputes with the RTB. If it is paid directly to the landlord, an awful lot of difficulties in the sector can be overcome.

Income tax exemptions should be granted for long-term letting. We mention in our submission that we have leases in place to deal with long-term renting. When I speak of long-term renting, I refer to multiples of four: four, eight, 12 or 16 years, or beyond, in either furnished or unfurnished accommodation. If the property is unfurnished, tenants will have a 20% to 25% reduction in their rent. They can furnish the property as they like, the same as if they were renting a local authority house, which does not come furnished. We feel that this is a vital appeal. We raised this with Ministers, Deputies and so on, but to no avail. It is a concept that needs to be considered and one in respect of which we would be very supportive.

Regarding the abolition of the proposed deposit protection scheme, work is being carried out at the moment by the RTB on that scheme. We have always argued that there is no need for such a scheme because we currently have, I believe, 324,000 units of accommodation registered with the RTB. Difficulties have arisen in less than 1% of cases administered through the scheme, and that figure has been reducing significantly in the last two years or so. The reason for the reduction is probably the education, training and information given to our landlords, who are getting abreast of this whole situation, so we feel that the deposit protection scheme in its current form should be stopped immediately. We proposed simple alternatives at various committees previously. One alternative would be to have a designated bank account for landlords in which all deposits are lodged. A similar provision is in place for solicitors, accountants, auctioneers, insurance brokers, etc. This would be a simple process once it is governed by the RTB. Another alternative would be to increase the fee for registering with the RTB from €90 to €95, which would create a capital sum for payouts in cases where people are not satisfied and in the context of getting one's money back from the offender, be it a landlord or a tenant. This would bring in €500,000 per year because there are approximately 100,000 or 103,000 registrations per year. That €500,000 would be an ideal way to deal with the matter, rather than the current amount of bureaucracy which has introduced something that is not necessary for tenant or landlord. The problem with the scheme, if and when it is brought in, is that if tenants decide to leave, they will not get their deposits back for months or longer because they will have to apply in conjunction with the owners of their properties for the release of the funds from the board. Tenants want their money back the day they are finished, and they are entitled to it. It is their money. A current account especially for deposits would be a simple way of administering this.

Funding should be put in place by the local authorities for any refurbishment work to be done or we should be allowed to borrow money from credit unions or the like at a very low interest rate.

I could go on about these matters for quite a while but I will leave it to the Chairman and the committee to ask any questions they feel might be relevant to the situation.