Tenants bidding against each other causing rent increases – RTB

The chair of the Residential Tenancies Board Tom Dunne said demand is behind increasing rents
Tenants bidding against each other causing rent increases – RTB

Gráinne Ní Aodha, PA

The chair of the Residential Tenancies Board (RTB) has said that tenants bidding against each other for limited available accommodation is increasing rent prices, and not landlords.

Tom Dunne also admitted that “effectively” only those on high wages can access security of tenure through paying higher rents that institutional landlords charge.

The comments come after the Irish Examiner reported that Mr Dunne said that the best type of rental accommodation people could have in the private market is with so-called 'vulture fund'-owned properties.

Speaking on RTÉ Radio’s Today with Claire Byrne programme, Mr Dunne said that in the case of small or accidental landlords, they can end the tenancy if they want to use it themselves or to sell it on.

“In the case of a fund, or an institutional landlord, their business is renting, so they’re not going to want to get vacant possession because they want the tenant in there, and secondly, they can’t regain possession for family use.

“So effectively you’ve got indefinite security of tenure if you’re renting from one of those funds.”

 

He continued: “In any market you pay more for reliability. If you’re in the second-hand car market, you will pay more for a car that has a reliable reputation than one that has not got a reliable reputation.”

He said institutional funds charge more to rent their properties than smaller landlords because “they are offering a product that has dimensions which are more attractive to tenants and therefore tenants who are attracted by that will pay more and they will bid out people who are on a smaller income.”

“What I’m saying is that this notion, I think it is a notion there, that landlords charge what they want in the market is not quite the whole story.

“Because what happens is that tenants in a market where there’s a shortage of accommodation, bid against each other to get that available accommodation. So it’s demand that’s increasing rents.

“People who supply accommodation are price takers in the market.”

When asked whether these views represented a ‘let them eat cake’ line, Mr Dunne said “absolutely not”, and added “it’s just a recognition of reality”.

“I am not saying rents should go up… they should come down. But what I’m saying is the way to get them down is to increase supply,” he said.

When asked whether those who have a lot of money can get access to security of tenure, Mr Dunne said “that’s effectively where we are really”.

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