TENANTS ARE, ON average, spending 36% of their monthly income on rent, according to a new survey.
The Residential Tenancies Board (RTB) rental sector survey, launching later today, looks at the country’s private residential sector using the views of tenants, landlords and letting agents. It included a nationally representative survey, nad five thematic focus groups with tenants.
Tenants in the survey were asked what percentage of their monthly net income (after tax) goes towards paying rents. The survey found that on average, tenants spent 36% of their monthly net income on rent, though this was higher in Dublin. The median rate spent on rent was 30%.
Half of all tenants claimed they spent 30% or less of their monthly net income on rent, while a quarter said that they spent more than 40% on rent.
The most common living situation among Dublin renters is ‘living with others’ (27%). Outside of the capital, the most common living situation among renters (39%) is ‘living with my spouse or partner with children’.
The survey also found that those renting in Dublin face paying a higher deposit for their current property (€1,450 on average) when compared with tenants renting outside of Dublin (€800 on average).
When asked their reason for renting, 20% of people said it was because they can’t get a mortgage, while 15% are renting while they save the deposit for a house.
Looking to the future, 36% of tenants expect to still be renting in ten years’ time, while 50% expect to be the owner of their own home in ten years’ time – 34% say the same in five years’ time.
When it came to the relationship between landlords and tenants, 79% of tenants said their renting experience was either positive or very positive.
Some 88% of small landlords surveyed rated their experience with their tenants as positive or very positive when managing their tenancies.
The survey found that 26% of small landlords, owners of one or two properties, are planning to sell a rental property within the next five years. However, large landlords (with over 100 tenancies) say they are planning to continue to invest and expand their portfolios.
The RTB’s tenancy registration data shows that small landlords who own one or two properties make up about 86% of all landlords, and supply an estimated 53% of the private tenancies in the rental sector. At the same time, while growing, large landlords currently still only manage less than 6% of private tenancies in the sector, according to RTB data.
“Despite any potential changes in the profile of landlords, these smaller landlords will nevertheless likely continue to provide the most significant proportion of the private rental accommodation for the sector well into the future,” said Pádraig McGoldrick, Interim Director of the RTB.
“However, with 26% of small landlords indicating an intention to sell a property within the next 5 years, there is potential for increased pressures on supply and rent levels during this period.”
Following the signing of the rent increase bill into law last week, all rent increases are to be made in line with the nation’s inflation rate.
The Bill will ensure that rent for properties in Rent Pressure Zones (RPZs) can only be increased in line with the Harmonised Index of Consumer Prices (HICP).
Previously, landlords had the power to increase rents in RPZs by 4% annually.
There were concerns that landlords would impose rent increases of up to 8% on tenants once the temporary ban on evictions and a rent freeze set during the height of the Covid-19 pandemic came to an end. However, this law will not allow for an 8% rise.
The RTB will establish and maintain a new RPZ calculator and publish a table of relevant HICP values to assist with the lawful setting of rents in these pressure areas.