Most of the committee fully understands the value of the RTB. Many of us are vocal advocates of it. We are unique in having a non-judicial body for mediation and dispute resolution. That is a very good thing. I think the RTB often gets wrongly criticised for inadequacies in the legislation or the resourcing. These are not ultimately matters in the RTBs control.
I will make a couple of concluding comments and then I have two specific questions. On the question of the rent pressure zones, RPZs, I think there is a solution to that which is, in general, going down to the district electoral divisions, DEDs, does not make any sense for the reasons Ms Gallagher outlined. However, anomalies can happen in commuter belt counties which are a heavy concentration of urban in one end of the local electoral area, LEA, and a heavy concentration of rural dispersed in the other. In those small number of instances, a DED or a combination of DEDs could provide enough data. It is really rare that the rental market and the LEA boundaries are not contiguous. We had it with Limerick and Waterford. Unfortunately rents rose so the LEAs were incorporated.
There is a requirement for a change in the legislation to give the RTB the flexibility to say this portion of the LEA should be included when an assessment of one or more of the DEDs gives the board sufficiently robust data. We have a bizarre situation where as a result of one local government change there is an LEA where half of it is in the rent pressure zone and half of it is outside. That is an anomaly. I think there is a fix that would satisfy Ms Gallagher's concerns.
I want to make an observation about the survey data. There is an interesting similarity between the table on page 5 and the table on page 9 where the question is asked of those landlords who are considering exiting and those landlords who have exited.
When you look at the reasons, they are not all identical but it seems that three categories of landlords in both sets of data are in a similar position. When we hear someone talking about negative equity, that speaks to the idea of the accidental landlord; or those who never bought a property to be a landlord, but got trapped in negative equity as their family size changed. It is important to understand that these people are leaving, no matter what we do, as soon as they return to positive equity. The next category comprises those I call the pension pot landlords; or those who primarily bought a rental property not for the rental income but for the lump sum on or approaching pension age. The third category comprises those I call the semi-professionals; or those who bought a second property even though being a landlord is not their primary profession. They are generally the ones who are concerned with what they describe as over-regulation or over-taxation.
When we look at both tables, we see that approximately 25% are exiting as accidentals, approximately 25% are exiting as pension pot landlords, and approximately half are exiting because of what they believe is over-regulation and inability to make profit, etc. That is a very back-of-the-envelope read of the data. I am highlighting this because I want to make a suggestion. As the RTB further refines its research and its questionnaires, if we were able to try to get greater clarity in terms of the primary reason people are leaving we might end up with a clearer picture. Why is that important? When the IPOA and the IPAV made a strong and legitimate presentation on behalf of landlords, their fundamental ask was a lowering of the core rate of tax for landlords. However, if only 15% of landlords are thinking of leaving and if only half of those are thinking of leaving primarily because of taxation- or profit-related issues, in my view that supports the Government and tax strategy group paper that it is not the right policy approach. I am not asking for a comment on any of that. I am suggesting that a refinement in the questions asked in future versions of the survey could produce really valuable information that could really inform the policy process. I just want to float that.
We often have a conversation with the working assumption that it is inevitable and good that the private rental sector grows. We have had some really interesting testimony here, for example from Dr. Mick Byrne of UCD. He has been doing a lot of comparative analysis around what is happening in different rental markets. His analysis lends itself to asking whether we want it to grow. Our private rental sector grew at a rapid pace from the year after the RTB was formed until 2016. It grew in what was, in many ways, an uncontrolled environment. Many of the problems we are now dealing with are because of that. If our private rental sector is between 18% and 20% of the overall housing system, is that the right size? Do we want it to be smaller, given that one third of all people living in the private rental sector are social housing tenants subsidised by HAP, RAS or rent supplement? I wanted to introduce that again, not for a response but in terms of the RTB's own internal policy considerations and our considerations as a committee. The bigger question here is whether 20% is too big. Should we be looking at a smaller, much more high-quality, more efficient and well-regulated private rental sector? I am throwing that out there.
On the question of streamlining, I think the witnesses would find a very receptive audience in this committee. I appreciate that they give policy advice to the Minister, and not the committee. There is a line that cannot be crossed. To pick up on the point made by Senator Cummins, however, if they are in a position to share observations about what is and is not working in their processes, this committee would genuinely like to hear them. I encourage them to do that.
I have two quick questions for Ms Gallagher. She was saying that when the new notice-to-quit data come out, there will be something new in them. I think she said the data will cover all notices to quit. I do not know if I misheard her. Maybe she could explain that. If there is a big jump, and it is not necessarily because of an increase but because we are collecting something different, it would be useful to know that. Likewise, the more we move to annual registration, the more we are going to get an accurate picture of what actual market rents are, rather than asking rents or renewed rents. Would it be fair to say that once we get to the end of the first year of registration, the gap that used to exist between the RTB rent report and the Daft report, which has closed, will widen again because of a much more accurate picture of actual market rents? Is that her expectation of the data?
