An investigation by the Central Statistics Office (CSO) to determine why there was a discrepancy of 84,000 in official estimates of the size of the private rented market has found a large number of “informal” rental arrangements around the country.
The major discrepancy emerged last year between the number of tenancies noted in the 2022 Census and the number of rentals officially registered with the Residential Tenancies Board (RTB). This led to concerns that the true size of the rental sector in Ireland was unknown.
In a letter to the Oireachtas Committee on Housing, director general of the CSO Jennifer Banim has outlined how a matching exercise was conducted between the two organisations’ records.
This revealed there are 47,754 possible informal rental properties, while a further 25,248 possible formal private rental properties were also identified.
Up to 50,000 ‘informal’ rental arrangements with mean monthly cost of €806, revealed in study
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The CSO noted that “certain informal rental arrangements in the Irish housing market may be currently outside the scope of the RTB regulations – such as owners’ relatives living in a property – but may still lead to a positive response on the Census form”.
In a letter to the committee Ms Banim said the nearly 50,000 dwellings with informal letting arrangements that are captured in the Census “possess characteristics which makes them likely to be in an informal letting arrangement and therefore may not be required to register with the RTB”.
Speaking about the 25,000 dwellings with formal rental arrangements, she said those rental properties are “not currently registered with the RTB but possess certain characteristics which makes them likely to be in the private rental market and therefore required to register with the RTB”.
All landlords are required to renew the registration of their tenancies to the RTB. Since 2022 they are required to do so on an annual basis.
Examples of potential informal rental arrangements include instances where an owner lets the property to a relative or acquaintance for no rent or below market rent. This could also apply to non-traditional dwellings such as so-called “granny flats” built adjacent to a property owner’s residence.
It could also apply where a property is made available to the occupant by their employer as part of the employment arrangement, or where there is a sub-letting arrangement between a prime tenant and additional tenant. It could also apply to a guardianship agreement whereby someone is allowed to live in an empty property by the property owner for no rent or below market rent in order to ensure the property is maintained.
The CSO research revealed that these possible informal rented properties had a mean monthly rent of €806, approximately 36 per cent lower than for similar properties on existing databases.
The headline findings from Census 2022 were that 330,632 households indicated they rented their homes from a private landlord on April 3rd, 2022. The RTB published figure for the number of private rented tenancies registered with it as of December 31st, 2022, was 246,453 – a difference of 84,179 tenancies.
After the “extensive data-matching exercise” was completed the final difference between Census 2022 data and RTB data was found to actually be 73,002 unmatched private rentals. Explaining the difference in the final discrepancy, the CSO research paper said that properties which were found to be availing of the rent-a-room scheme were removed. Dwellings where there was more than one household recorded in the Census were also excluded, as were homes owned by local authorities.
Of the nearly 50,000 informal renting arrangements the CSO analysis found that they were more likely to be located in predominantly rural areas.
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