Almost three months after the long-awaited commission report on the private rental sector was published by the Government, there are still no indications that its findings are to be implemented. This inaction is all the more surprising because the same Government introduced the Bacon measures within 24 hours of receiving all three reports, the last of which was published in June of this year. The purpose of the Bacon exercise was to speed up the supply of starter homes in the greater Dublin area but this simply has not happened and prices have continued to soar.
Instead, the same young couples who have watched the market run away from them are now being priced out of the rental sector because of a severe shortage of supply since investors were excluded from the market courtesy of Bacon. A glance through the classifieds will show just how bad the situation is, with virtually no two-bedroom units available for under £1,000 a month. At this level, it's hardly surprising that at least one young couple has resorted to living in a shed in Blackrock, as featured in last week's Late Late Show.
The Government might yet get off the hook by taking up the commission's suggestion to allow landlords renting apartments to be treated for tax purposes in the same way as any other business, and being allowed to off-set mortgage interest charges against rental income. The knock-on effect of this would be to bring more landlords into the tax net, as they would have to register their properties to avail of the tax concessions.
While the commission recommended a number of measures to encourage corporate investment in the rental market, it is still considered a tricky area following the experience of Irish Life in the sale of the Mespil Flats. In any case, the corporates are getting a much better return in the office market than they could hope for in the apartment sector, where tenants cause endless headaches.
Whether the Government decides to relax the Bacon measures or not, it now has a second crisis on its hands, one that was anticipated by every estate agent once the investors were pushed out.
