The Irish Minister for Housing, Eoghan Murphy last week released a statement detailing proposals to be brought to parliament next week to amend the Residential Tenancies Act 2004 to help those in the rental housing market.
Chief amongst the proposals are a moratorium on rent increases for the duration of the crisis, and a ban on evictions. This applies for the duration of the emergency and to all renters, not just those who have had incomes compromised by COVID-19. The notice period on tenancies of less than six months is also being increased from 28 to 90 days.
Goodbody Stockbrokers say the temporary rent freeze measure will have only a marginal impact on PRS investment vehicles like IRES, as Goodbody were assuming only a modest 2% of rental growth for FY20 before the COVID crisis. Goodbody say the ban on evictions is also of minimal impact given the low level of tenant turnover and limited bad debts in the IRES portfolio.
The measures compliment the three months mortgage breaks that have been afforded to mortgage holders affected by the crisis which also apply to buy-to-let landlords. The Government has stressed its expectation that landlords availing of this support, pass on that flexibility to tenants similarly affected. To clarify, tenants are still expected to pay their rent during the crisis.
To coincide with the release, Irish Institutional Property, an industry body that represents a number of institutional landlords issued a statement supporting the measures introduced by the Minister, agreeing to forego any pending rent increases and to halt issuing possession orders to impacted tenants for the duration of the crisis.
According to Goodbody, "Overall, the temporary rent freeze/eviction stay measures will be a short term marginal headwind to the performance of institutional landlords but it is welcome to see the industry move in lock step with Government during this crisis, mitigating any potential reputational risk that has befallen the sector recently."