Property owners relieved at lifting of eviction ban, says Cork auctioneer

Landlords are relieved at the lifting of the eviction ban and many are availing of the opportunity to sell their properties. They fear that if it is reintroduced by a Sinn Féin-led government, it will limit their opportunity to maximise the value of the property, a Cork auctioneer has told The Irish Times.

Mark Rose, MD of Rose Property Services which manages some 700 properties around Cork city, said the uncertainty around tenancy and letting arrangements is prompting many landlords to exit the market and the lifting of the eviction ban will now enable them to do so.

“The one thing that somebody investing in the property market wants is certainty. Buying a house is a significant investment and they want to be able to plan for 10 or 15 or 20 years.”

Mr Rose said most of the private investors in properties are in their 50s and 60s and they are already beginning to look at how they might exit the market, with changes such as the introduction of rent caps in 2016 and tenancies of indefinite duration in 2022 hastening that desire.

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“We have a client, a couple in their 80s who have a property in Rochestown, which they are renting at a very low rent, €1,000 a month. When they heard Sinn Féin are not going to allow people like them sell their property to an owner occupier, they decided to sell the property before any change.

“They know that if they are only going to be allowed to sell the property to another investor, they are not going to get anything like the price they would get from an owner occupier because no investor is going to pay as much for it if they know they can only get €1,000 a month in rent.”

Mr Rose said that while Sinn Féin are not in a position to effect any change in opposition, even talking about proposed changes is causing anxiety in the market. He instanced what happened in 2016 when the Fine Gael-led government introduced rent caps in Rent Pressure Zones.

Mr Rose said the Residential Tenancies Board reported in 2021 that there were over 40,000 fewer rental agreements in place when compared to 2016 and he said he feared a further flight from the market by landlords, which was not good news given the shortage of new houses being built.

Auctioneer Kevin Barry, MD of Barry Auctioneers, doesn’t handle property management, but he has seen plenty evidence in recent weeks of the impact of the proposed lifting of the eviction ban, with many of the sales he is now handling coming from private landlords wanting to exit the market.

Mr Barry said many of these property owners are “accidental landlords” in that they may be a couple who had each bought their own house in the early 2000s. They retained both properties when they married because both properties were in negative equity and selling was not an option.

“A lot of these landlords would have bought their houses on tracker mortgages and now that they have increased, it’s no longer viable for them to continue as landlords. Given that property prices have come back up, they are not in negative equity, they are now able to get out and sell.

“There is no benefit to being a one-off landlord at the moment with all the regulations and we’re seeing that in terms of the sales we are handling – we’ve sold four houses in Mount Oval here in Rochestown in Cork in the last two months and three of them were investors selling up.”

Mr Barry said the lifting of the eviction ban, plus the prospect of further restrictions being introduced by a future Sinn Féin government, means people are now availing of the opportunity to exit the market and seeking to recoup their investment and maximise their return.

Mr Barry instanced one of the properties he recently sold in Mount Oval in Rochestown, which had a rental cap of €1,150 a month which would give an annual income to a potential investor of €13,800 but which was bought by an owner occupier for €315,000.

“The rule of thumb we currently use for valuing investor property is 12 times the annual rental income so in the case of this house, it would have been valued for investment purposes at twelve times €13,800 or €165,600 – literally half of what it is worth on the open market.”

Mr Barry said that, over the last month, he has been contacted by 17 landlords who are preparing to avail of the lifting of the eviction ban and have served notices to quit to tenants in anticipation of selling their properties before any further restrictions are introduced in the coming years.

But he warned that this exodus from the market of small private landlords may have consequences for the Government. It may affect exchequer funds as a decline in the number of landlords will also lead to a reduction in tax to the Government.