Rental Market

According to the recent Daft report on the rental market the supply of rental accommodation has increased almost twofold in the last year. How can this be explained? The Daft report suggests that the increase in supply arises from investors letting out property which had previously not been let out because the increase in mortgage interest rates have forced investors to recoup these increases by way of rental income where the properties had been previously been unoccupied. This is a speculative and unlikely explanation. Other commentators suggest that the substantial increase in rental property arises from Builders/Developers letting out their recently completed developments rather than selling them because they cannot get the prices that they require. Whatever the reason it is an anomaly given that investors have stopped investing in the Irish market since the interest rates started to rise and the prices to fall. Daft suggests that since the middle of last year the supply of rental property has begun to outstrip demand. This will lead to a fall off in rental increases. Will this affect the housing market? There has been a presumption around that because of the increase in rents over the last 18 months renters will be inclined to come back into the house marketing and start buying again. However if rents start to stabilise or fall this pressure will be reduced. In addition since the implementation of the Residential Tenancies Act 2004 giving tenants occupational rights tenants have more security of tenure since they had before. Had this legislation had an effect on the housing market? Has any research been done on this?