Rents soar as supply squeeze bites

Can anything positive be said about the private rental sector at present? Rising demand has been met by shrinking supply in the last three to four years, particularly in Dublin, leading to huge rent inflation and stiff competition for accommodation.

Last year, in an effort to curb "speculative demand" for property, the Government introduced a flat rate of 9 per cent stamp duty for all housing transactions for non-owner occupiers. The departure of investors from the market significantly reduced the amount of new rental property coming on stream. Population increases in urban centres have put pressure on the available stock of rental property.

Young Irish workers leaving their parents' homes, rural dwellers moving to the cities, returning Irish emigrants, EU and non-EU immigrants are all swelling the ranks of accommodation-hunters.

Large numbers of young people on middle incomes who, until recently would have aspired to home ownership after several years of employment, are also stuck in the rental sector. The problem for more vulnerable groups is that these "professionals" have first pick of the market.

Mr Kevin Murphy of Threshold has found that people on any budget are having difficulty securing accommodation. "But those on low incomes, social welfare recipients, families and people from ethnic minorities are clearly being discriminated against."

Rents in Dublin have been increasing by an average of 15 per cent per year since 1999, leaving many basic properties out of the reach of low-income groups.

The average rent of a one-bedroom apartment in Dublin is £650 to £700 (#825-#889), or £750 to £800 in the city centre. Prices for one-bedroom properties in Cork start at £550.

So what, if anything, have tenants got to look forward to? In January, the Minister of State at the Department of the Environment, Mr Bobby Molloy, announced details of his two-year plan to reform the sector. It followed on from a report by the Commission on the Private Rented Residential Sector last year.

The Minister's plans include the establishment, on an ad-hoc basis this autumn, of a Private Residential Tenancies Board and the enactment of other legislation over the next two years. The board will deal with disputes between tenants and landlords.

The Government plans to enact legislation establishing the board on a statutory basis over the next two years. Legislation will also be enacted to improve security of tenure, allowing tenants who have been renting for more than six months to remain in their homes for four years, unless the landlord needs to recover possession for specified reasons.

Rent levels under the plan can be no greater than the market rate and reviews cannot take place more frequently than once a year, unless the accommodation changes substantially before that.

In the meantime, Family Money has looked at the realities of renting a place to live. From the first phone call to the notice to quit, this is a rough guide to the rights, responsibilities and hassles of making a home in the rental sector.