Charities call for restrictions on rent rises in high-inflation areas to be nationwide

Landlords claim they are being ‘demonised’ for the State’s failure in home-building

Minister for Housing Eoghan Murphy: he  has been criticised for not doing enough to protect landlords

Minister for Housing Eoghan Murphy: he has been criticised for not doing enough to protect landlords

 

Housing charities have called for Government restrictions on rent increases in high-inflation areas to be extended nationwide. However, landlords claim they are being “demonised” for the State’s failure in home-building, describing the creation of 19 new rent-pressure zones as “a blunt instrument”.

First introduced in December 2016, rent-pressure zones are designated areas where rents cannot be increased by more than 4 per cent per annum. This applies to new and existing tenancies.

The new zones announced on Monday are across 11 counties. They comprise Ardee, Arklow, Athenry-Oranmore, Athlone (Westmeath side), Dundalk-Carlingford, Dundalk south, Fermoy, Gorey, Gort-Kinvara, Graiguecullen-Portarlington, Kells, Kilkenny, Limerick city north and west, Midleton, Portlaoise, Trim, Waterford city east and Waterford city south.

Zones already exist in Dublin, Cork and Galway, and commuter towns such as Bray, Greystones, Drogheda and Navan.

Housing charity Threshold said the extension of the scheme was a “belated recognition that rapid rent increases are now a feature of life in the private rented sector across the State”.

“The widespread nature of the problem of rising rents has been obvious for some time, and this designation of new rent-pressure zones will help give tenants and prospective tenants in these areas some relief,” said chief executive John-Mark McCafferty.

“Over one in five homes in Ireland are privately rented yet this sector is also the most expensive and least secure form of housing in Ireland. Threshold would like to see rent-certainty measures providing long-term security extended to all renters.”

Private sector

Simon Communities in Ireland spokesman Wayne Stanley said rental costs in the private sector were still “far too high nationwide”.

Mr Stanley, noting that the RTB Rent Index for the first quarter of the year showed average rents increased by 8.3 per cent over the year, said the extension of rent-pressure zones was “welcome”, but that the controls “need to be enhanced”.

Irish Property Owners Association chairman Stephen Faughnan said the measures were “a blunt instrument” taking no account of the level of rent charged, the level of indebtedness of the property owner, or the cost of the provision of accommodation.

“Rent-pressure zones disadvantage substantially landlords that reward their good tenants by keeping their rents low. Rent control does not encourage investment, increase the supply of rental accommodation and was declared unconstitutional in Ireland in 1982.”

Institute of Professional Auctioneers & Valuers chief executive Pat Davitt said there had been “a deafening silence” from Minister for Housing Eoghan Murphy and the Residential Tenancies Board (RTB) around protections for landlords.

Mr Davitt said the RTB needs power to eject tenants who do not pay rent and damage property. “The process at the moment takes far too long and is too costly for landlords. It’s one of the key factors driving private landlords from the market.

“The fact of the matter is the private landlord has been demonised and is being regulated out of existence, with the likelihood that it will have no meaningful impact on the lives of sound tenants.”

EU monetary policy

In the Dáil Labour leader Brendan Howlin said the maximum rent increase should be capped at 1 per cent for three years to bring housing inflation into line with EU monetary policy.

Mr Howlin said the creation of rent-pressure zones had given landlords a signal to increase their prices by 4 per cent a year, which was pushing people out of properties.

Mr Howlin pointed to the European Central Bank’s (ECB) decision to set a 2 per cent non-optional ceiling for inflation. “The Government is giving landlords twice the rate that the ECB considers appropriate.”

Mr Murphy later acknowledged that rents were still too high and still “rising unsustainably”.

However, he said the largest expansion of rent-pressure zones was coming with 19 new locations added, along with changes in options for short-term lettings. They would have a positive impact on the rental sector but “we need time now for that to bed down”.