Cuckoo funds are strengthening their grip as they replace individual investors in the residential property market.

New research shows a marked decline in the numbers of ordinary people investing in buy-to-let properties.

In their place, cuckoo funds now account for around 20pc of all residential market transactions, according to an analysis by the Banking and Payments Federation Ireland.

Cuckoo funds are so-called because they are seen to push first-time buyers out of the market. Now they are accused of pushing out buy-to-let investors.

They include large institutional investors such as pension funds, specialist private rental firms and real estate investment trusts (Reits).

Some of these have proved controversial as they have favourable tax deals compared to other property purchasers, something the Government has committed to reviewing.

A damning report by a UN special rapporteur recently concluded that the Government is actively helping faceless multinational funds buy up residential property here.

UN special rapporteur on the right to adequate housing, Leilani Farha, wrote to the Government here and in other countries.

She accused them of facilitating the "financialisation of housing" through preferential tax laws and weak tenant protections.

The housing report from the Banking and Payments Federation found that cash sales of property accounted for 27pc of all sales in the first three months of the year. This is down from 31pc a year earlier.

Up to recently the private rented sector was dominated by individual investors buying property. They accounted for 20pc of mortgage draw-downs in 2006.

Economist with the banking body Ali Ugur said there has been a huge decline in individuals buying properties to rent since then.

"We have seen increased activity by the non-household sector which includes companies such as pension funds, specialist private rental firms and real estate investment trusts (Reits) in the domestic residential property market."

He said that in the first quarter of this year funds accounted for around 20pc of all market purchases. This shows that buy-to-let sector investors - traditionally individuals have been replaced by institutional investors in the Irish housing market over the last 10 years, particularly in the new apartment sector.

The new housing market monitor report from the banking body shows signs of progress on housing supply, but Mr Ugur said significant challenges remain.

There were some 5,800 housing commencements in the first quarter of 2019, up 31.6pc compared with the same period of 2018. Mr Ugur said there was strong demand for housing, and there was a need for the private and public sector to play a role in addressing housing needs.

Irish Independent