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THE GOVERNMENT HAS approved a 2% cap on rent increases in areas designated as Rent Pressure Zones.
It will cap rent increases at 2% or the level of inflation as measured by the harmonised index of consumer prices, whatever is lower.
If you want to check whether your area is in a Rent Pressure Zone, or whether your rent is due to increase, you can check the Residential Tenancies Board’s calculator (note, the 2% cap has not been included in this, as it has to pass through the legislative stages of the Oireachtas, and signed by Uachtarán na hÉireann before it comes into effect).
Speaking to reporters today, Housing Minister Darragh O’Brien said:
“Earlier on today, I brought to Cabinet the Residential Tenancies (No 3) Bill, which will cap rents at inflation or 2% – whichever is lower.
“We have seen an increase in inflation which I did flag back in July and across Europe it has been the case where inflation rises in the shortterm.
So these measures have been approved by Cabinet now, so effectively we’re raising rents to 2% in the future – we’ll get that bill passed in the coming weeks as well.
A previous cap of 4% on annual rent increases was replaced on 16 July 2021. Rent increases in RPZs were technically prevented from exceeding general inflation as measured by the Harmonised Index of Consumer Prices (HICP).
The Government’s aim was to bring about far lower rent increases for the estimated 74% of all tenancies which are in RPZs. But the cap was difficult to police, as many renters feared being kicked out of their homes for reporting rent increases above the cap.
Sinn Féin housing spokesperson Eoin Ó Broin has said that a 2% rent increase cap in RPZs will “do little to halt rising rents”, and said that an outright ban is needed.
Ó Broin said that new rental properties on the market are exempt and it is difficult for the RTB to monitor or sanction landlords who are breaching the rent caps.
“Just like his last attempt, which saw the government linking rents to inflation at a time when inflation was overtaking the old 4% cap, this measure will fail.
“A rental cap limited to areas in rent pressure zones won’t work. The legislation as it currently stands has too many loopholes.”
Ó Broin added that the cost of renting homes should not be linked to the market and “affordable” should be priced between €700-900 a month, with tenancies of indefinite duration.
With reporting from Christina Finn.
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So my landlord can ‘put the house up for sale’, thereby providing a legitimate reason to evict me, then change their mind and re-list the property at a higher price. If anything, this will probably only increase rent prices and sadly levels of homelessness.
What an incredible flawed ‘solution’ from the government.
Roll on the next election.
@ImYourNumber1Fan: No. They have to sign a sworn statement that they intend to enter into a contract to sell. So if they breach this, it is simple to procecute.
@Con Nagle: intentions change.
@ImYourNumber1Fan: If they evict you on grounds of planing to sell they have a fixed term in which to sell the property otherwise they are legally obliged to offer it back to you first. I work in the industry and the legislation gets more confusing by the week.
@ImYourNumber1Fan: I could be wrong but I think the property has to be off the rental market a few years before it can go up by more than 2% so if they don’t keep renting it and increasing it 2% per year they would lose out on those 2% increases yearly and only be able to put it up 2% total unless they’re willing to not rent it out at all for a few years (I think it’s 4 years or 3 years it has to be off the market) so if they’re willing to take the hit for the few years they could do that but they couldn’t do that short term.
@ImYourNumber1Fan: I’m pretty sure the landlord has to offer it back to you at the original rent you paid ..
@Adam: a question though, whats a fixed term and what do those people do in the interim surely find something else therefore no point offering it back to them as they might be under a new term agreement with another landlord …. if they’re lucky!!
@ImYourNumber1Fan: Not correct. If the property isnt sold the person is obliged to offer it back to the tenant at the same rate. If tenant has moved on any new tenant must be offered at the old rent.
I believe the property has to be unrented for at least two years in order to up rent to market rate.
PRTB has tightened very significantly the rules to get exemptions to rent pressure zones.
@ImYourNumber1Fan: They are all selling to get out of a price controlled market ahead of a sinn Fein govt and not in the least interested in letting again. It is supposed to be a business not a social service.
Homelessness will continue to gather pace, who in their right mind would want to be a landlord in Ireland now.
Rent reduction at the point is needed.
@Darren Sheridan: Absolutely, it’s been let go crazy. Something needs to be done to ensure secure housing for the citizens of Ireland. If that takes a referendum to change the constitution so be it!
Good luck with getting that through a vote!
Surely the entire country is a rent pressure zone at this stage. No help for those of us not in these designated zones. By rent recently increased by 15 percent and all they had to do was send me pictures of 3 houses in my area going for same price. Its mad.
Rents are high because there aren’t enough rental units – its that simple. Build more houses + apartments! The state has a role but anyone who thinks the state is going to be able to build enough houses in a timely fashion is deluded. Look at the state of the health service, the water infrastructure, the council housing stock. The public sector unions have sapped any initiative or drive from the PS. In places like San Francisco, Stockholm and NYC where they have rent caps they found that it reduced number of rental units, increased homelessness and actually increased rents over time. It makes the problem worse. We need to cop on. We’re condemning a whole generation to a life long housing crisis. through bad policy.
@Damon16: Rents are high because there aren’t enough rental units and landlords are taking advantage of that – its that simple. There I fixed your opening sentence for you.
@Damon16: True and new ones cannot be built because it is unprofitable to build. No new general housing supply. Nothing affordable can be built at a profit so it just does not happen. The exception is the Reits who can get free money and pay the economic cost of building, but then they just rent to the multinationals anyway.
Rent zones don’t work. They never have but that doesn’t matter because the government has to be seen to be doing ‘something’
They didn’t enforce the 4% cap so what good will a 2% one do. Lost my home with my rent going up €450 a month, reported it, nothing was done.
It’s disgraceful that they haven’t frozen rents by this stage. They can see the hardship it causes people, yet they don’t want to halt their own ability to collect high rents themselves, as most of them are landlords. To so clearly put ur own interests before millions of people ur meant to serve, is a clear sign none of them should be working there.
@Rob Gale: Freezing rents might help those currently renting but will reduce the supply going forward locking some out of renting altogether
@Mickety Dee: no it wouldn’t
Jeez I’m a landlord. Just put a big fat freeze on for 5 years.
Madness and stupidity continuing actions that have proven not to help praying for a different outcome. All the affected landlords have are lodging registered claims against the Govt now.
Price freezes are unconstitutional eventually the state payout of taxpayers money with interest will be massive. Happened before with the hospital consultants.
Despite the Govts intentions price caps cannot work, everything just goes underground as both renters and landlords sidestep everything otherwise more rental units disappear.
Even worse landlords will only deal with those they trust not to be troublesome, so goodbye all families. The will never even be considered to rent.
have your say