Government seeking solutions to issue of soaring rents, says Noonan

Minister for Finance Michael Noonan has said the Government is trying to come up with “additional” solutions to the problem of escalating rents in Dublin.

His comments come amid growing tensions between Fine Gael and Labour Minister Alan Kelly following the failure to agree a comprehensive housing package for the budget.

Mr Kelly has described rent hikes above the rate of inflation as “immoral” and has proposed rent levels be linked to the rate of inflation for a set period until supply of housing can meet demand. However, the budget contained no provision to deal with escalating rents.

“There are conversations ongoing between my officials and the officials in the Department of the Environment,” Mr Noonan said.

“We all realise that there’s a problem in housing and in rent particularly in Dublin and we’re trying to come up with additional solutions.”

He said Nama would provide 20,000 houses, including 2,000 social houses, between now and 2020, and he hoped the private sector would also contribute.

“But more needs to be done and we’re working it out between us.”

Asked if it was the case that Fine Gael had adopted a cool approach to rent certainty, as Labour sources have claimed, Mr Noonan said: “When we have a package we’ll announce it and you can take the temperature of it.”

He was speaking to reporters after his annual post-budget interview with RTÉ Radio.

Earlier, Mr Noonan has said he “ran out of time” to deal with the Labour proposal to provide rent certainty.

“There is no quick fix. Everything that was done did harm. The interventions made the thing worse” he said. “I want to ensure that anything we do is positive and that it creates an extra supply of rental accommodation. Extra supply brings prices down.”

Instead, Mr Noonan said the State needs 25,000 new houses a year and he has asked Nama to build 20,000 houses over five years, amounting to 80 new houses a week when it is up and running.

“There is market dysfunction. That is why I’m bringing Nama in. There isn’t a quick fix,” he said.

Mr Noonan said the budget will put money into people’s pockets and young couples will “take the plunge” and buy new homes.

Meanwhile, Tánaiste and Labour leader Joan Burton has insisted rent certainty will be introduced as part of a package of housing measures.

Ms Burton told RTÉ radio’s Morning Ireland that high-level discussions on housing were continuing on a weekly basis.

“We’re working towards a proposal which will actually provide for the kind of orderly rental market that will give... young people certainly about how much their rent will cost,” Ms Burton said.

She said rent certainty would be introduced when a package of measures on rent, including the provision of more affordable housing, was complete.

She described the measures as an interlocking set of policy proposals.

“No one thing in itself is the magic bullet,” she added.

Ms Burton said Mr Kelly was kick-starting the largest housing and development programme in the history of the State.

“That is a very big job and he’s doing it at a pace which I have to say I take my hat off to him and salute him.”