Rents rise 7% in largest national increase since 2019

A national rent rise of 7 per cent, the highest increase in more than two years, points to a "concerning level of non-compliance" with rent rules, Minister for Housing Darragh O'Brien has acknowledged.

The Residential Tenancies Board's (RTB) rent index for the second quarter of the year shows year-on-year rent price inflation of 4.4 per cent in Dublin and 10.4 per cent outside the capital.

Nationally rents grew by 7 per cent, the highest level of growth seen since a rate of 7.4 per cent in the first quarter of 2019.

The national standardised average rent stands at €1,352, an increase of €32 in since the start of 2021. Dublin remained the county with the highest average rent at €1,848 per month. The county with the lowest monthly rents was Donegal (€677 per month). At a local electoral area level, the highest rent was in Stillorgan, Co Dublin (€2,440 per month), and the lowest Ballymote-Tobercurry, Co Sligo (€645 per month).

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Padraig McGoldrick, interim director of the RTB, said while the sector may still be adapting to the Covid-19 pandemic and new rules linking rent to inflation were not yet reflected in the index, the level of increase was a “source of concern”.

While there may be legitimate reasons reflecting the rate of increase, he said “it may also indicate an unacceptable level of non-compliance by landlords with rent-setting regulations restricting rent increases in rent pressure zone areas (RPZ). The impact of not complying with these measures can be very severe, and the RTB is committed to ensuring increased compliance with these requirements”.

Mr O’Brien said he had “deep concerns” about the level of increase and has asked the RTB to instigate a campaign to identify and pursue non-compliance with rent-setting responsibilities.

“I have called upon the RTB ensure that their full powers and resources are brought to bear in initiating and executing a robust and thorough campaign to identify non-compliance and breaches in RPZ rent increase restrictions and related procedures, including those related to rent reviews and notification of exemptions from the restrictions.”

Opposition parties said the increase shows the failure of Government plans to curb rent rises.

“These figures are under the earlier rental rules and are not subject to the revised cap linking rents to inflation. However, rents in rent pressure zones showed rises of over 4 per cent, which indicated that there was widespread noncompliance with the 4 per cent cap,” Sinn Féin’s Eoin Ó Broin said.

“Why would this be any different under the new rules? Inflation was at over 3 per cent last month and many economists believe this will continue to rise.”

The increases were further evidence rents were “out of control” Cian O’Callaghan of the Social Democrats said.

“The Minister for Housing Darragh O’Brien is blaming non-compliance with rent pressure zones for these increases, which are far in excess of the 4 per cent allowed. However, the issue that needs to be addressed is that the rent pressure zones are ineffective and are simply not working. In fact, they have not worked since 2016 – when they were first introduced.”

Following the RTB report, Sinn Féin finance spokesman Pearse Doherty called in the Dáil for a freeze on rents and a tax break worth a “free month’s rent” in the budget in October. He pointed out that some tenants were paying €2,105 a month for a three-bedroom house in Dublin.

But Tánaiste Leo Varadkar said rent increases were now confined to the rate of inflation and this was effectively a rent freeze, adding that social housing had increased from 600 homes in 2016 to 6,000 in 2019 and after the Covid-19 disruption this would increase by up to 10,000 homes per year in coming years.