Eoghan Murphy criticised as rents surge by 7 per cent in one year

Minister for Housing says rent pressure zones need to work but rents are ‘unsustainable’

Minister for Housing Eoghan Murphy. Photograph: Tom Honan

Minister for Housing Eoghan Murphy. Photograph: Tom Honan

 

Minister for Housing Eoghan Murphy has said rent pressure zones are starting to work despite a 7 per cent year-on-year increase in rents nationwide.

Rents in Dublin increased in the second quarter to €1,713 a month, up from €1,599 for the same period last year. This amounts to a 7 per cent increase despite the city being declared a rent pressure zone three years ago. In such zones, existing rents are not allowed to increase by more than 4 per cent a year.

According to the data, the standardised average national rent for houses rose from €1,085 to €1,164, almost an increase of 7 per cent.

Rents across the country are 21 per cent higher than they were at the height of the boom in 2007 and 32 per cent higher in Dublin. Dublin accounts for 40 per cent of all tenancies in the country.

Speaking before the launch of the Simon annual report, Mr Murphy said the law had been changed in July to protect renters and enforce the rent control zones.

“These laws came in just after the reporting period we are hearing about today,” he said.

“We are very glad that the Residential Tenancies Board (RTB) is using its new powers and it is important to see that new supply is coming online.”

Mr Murphy acknowledged that rents are “unsustainably high” and he blamed the increase on new properties coming into the rental market which are not subject to rent pressure zones.

Rent inflation

“It would appear from the data that new properties coming to the market are contributing to rent inflation,” he said.

“People who are working hard are paying far too much of their hard-earned money towards their rent. That is not fair.

“We have to focus on affordable home ownership to help people caught in this rent trap into their own homes and that’s what we are going to continue we here.”

The quarterly figures are produced by the RTB. Its director Rosalind Carroll said the index only measures new tenancies, whether it be relet properties or new builds, rather than existing tenancies.

She said it will be the next quarter before the RTB will be able to ascertain whether or not rent pressure zones are being complied with.

Ms Carroll said there are 310,000 tenancies registered with the RTB, the same figure as last year and that supply remains the issue with many smaller landlords leaving the market.

“It is great to get in new supply, but we need to protect the existing supply,” she said.

On Morning Ireland she warned that rent increases in cities are forcing people to move out to more rural locations. “Traditionally in the rental sector we have never seen this before. People would have stayed close to their employment and close to the urban centres.”

Pressure zones

Two new rent pressure zones have been created, one in Carlow town where rents rose 12 per cent last year and the other in Macroom, Co Cork where rents increased by 19 per cent.

There was widespread criticism of the minister following the publication of the latest figures.

Labour Party housing spokeswoman Jan O’Sullivan said there needed to be a dwelling specific rent register so tenants can clearly see what has previously been charged.

She added: “It’s also time to consider introducing a temporary rent freeze as for those already paying extortionately high rents, a 4 per cent increase is in itself quite significant.

“We all know that house building needs to be urgently ramped up to deal with the housing crisis and Labour believes a state-led approach is the best way to tackle the issue.”

People before Profit TD Richard Boyd Barrett said the latest rent increases “reveal the total and utter failure of the government’s rent pressure zones and their wider housing policy”.

He called for an emergency rent freeze for three years to the introduction of rent controls where local authorities are given the power to set rents at affordable levels.”

The housing charity Threshold has said the 3 per cent increase in average rent in just one quarter shows that the affordability crisis in the private rental sector is getting worse.

“The 7 per cent annual increase is substantial, but the 3 per cent rise in just three months (April-June) suggests that we are going to see more and more people put at risk of homelessness as we head into the winter”, according to the CEO of Threshold John-Mark McCafferty.

“Rising rent inflation at a time when over 10,000 are already homeless is a recipe for a worsening crisis.”