HOUSING MINISTER EOGHAN Murphy has said he believes the rate at which rents are rising will moderate in the next couple of months.

Speaking at a press conference today, TheJournal.ie asked the minister why Budget 2020 did little for renters in Ireland at a time when the national average rent is now over €1,200 per month. 

The latest rent index report from the Residential Tenancies Board showed that from April to June 2019, the standardised national rent was €1,202 per month, that’s up from €1,123 one year earlier. 

While Finance and Public Expenditure Minister Paschal Donohoe said “the high cost of renting is a key concern for this government” the Budget contains little in terms of the rental sector.

Budget 2020 does commit to almost €2 million in additional funding for the Residential Tenancies Board to “support their increased powers to investigate and sanction non-compliance with Rent Pressure Zone measures”.

There are now 44 RPZs in operation throughout Ireland. 

Rent Pressure Zone (RPZ) laws were first introduced in December 2016 by then-Housing Minister Simon Coveney in order to tackle spiralling rents.

RPZs are located in areas of the country where rents are highest and where households have the greatest difficulty finding affordable accommodation. 

Under RPZ legislation, annual rent rises are capped at 4% in certain areas. 

However, in July, new research from the RTB reported that two-in-five tenants in RPZs still face rates of increases above 4% despite caps.

The research shows that there has been a moderation in price inflation of 2.5% to 3% per annum within the designated RPZ areas. 

Putting money into RTB

Murphy said today that he is “putting the money behind” the new Residental Tenancies legislation, to ensure that it can be enforced. 

He stated that “rent controls are working” however, he said the new laws need to be enforced. The minister stated that the Housing Department has “independent evidence” to show the controls are having an impact. 

“And that’s what the money will do to help with the RTB,” he said, adding that as the laws are enforced, the rate at which rents are rising should moderate. 

In terms of rent inflation, “quarter to quarter, you seen that rate of increase moderate, and we think it will moderate further. But we have to recognise as well, that it’ll never come down to a pure 4%”. 

The RTB report during the summer showed the share of properties whose annualised rental increase was greater than 4% dropped from 73.2% in quarter 4 of 2016 to 42.5% in quarter 3 of 2018 in RPZ areas.

The report noted that, with the data available, it isn’t possible to determine whether this is due to non-compliance with the RPZ scheme or whether it is due to valid exemptions from the scheme, such as substantial renovations taking place. 

Murphy said he believed a percentage of 4% across the board will not be achieved due the increase in supply, “which does push the number above four percent”, he said.

The minister stated that RTB data shows the difference in regulation between new tenancies and existing tenancies.

“Really it is inflation for existing tenancies that we need to be looking at, because they’re the ones that are under rent controls. 

He added that another rent bill will be introduced before the end of the year which will address tenancies of indefinite duration as well as deposits.