With many landlords in Ireland coming to the end of their 10-year interest-only mortgage period, buy-to-let arrears look set to escalate in the near term, the Institute of Professional Auctioneers and Valuers (IPAV) has warned.
In a submission to the Department of Housing, the group’s chief executive, Pat Davitt, said that it is unlikely that many buy-to-let landlords will be unable to cope with substantially higher mortgage repayments - capital repayments in addition to interest - once their interest-only arrangements end.
He said: “For many of these landlords the unsustainability of their position will become evident and many will be forced out of the market with the loss of such properties to the rental market, unless a solution is found.
“This issue requires an immediate solution if the existing stock of properties is to be retained within the sector.”
To help property investors stay afloat, IPAV in its submission, proposed equalising the treatment of residential property lettings as a normal business for tax purposes akin to the commercial property sector.
It also called for the introduction of tax incentives for landlords who agree to long-term tenancies of five, seven, 10 and 15 years.
“The number of people on the local authority housing list and the trend in the list is suggestive of market failure that warrants more proactive government intervention,” the group said.