Rent increases to be capped at inflation in pressure zones

Rent increases in so-called rent pressure zones (RPZs) are to be capped in line with inflation, and a ban on evictions of struggling tenants has been put in place for the rest of the year under new laws set to be introduced by the Government.

Rent controls were introduced in December 2016 to temper an overheating rental market. The controls mean that landlords of properties in so-called rent pressure zones – which includes all of Dublin and much of the rest of the country – cannot increase rents by more than 4 per cent a year.

However, in a statement on Wednesday, the Department of Housing said the caps will be replaced with caps in line with inflation only.

“The current cap of 4 per cent on annual rent increases will be replaced and rents in RPZs can now only go up, if necessary, in line with general inflation as recorded in the Harmonised Index of Consumer Prices (HICP),” it said.

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“This will result in far lower rent increases for the estimated 74 per cent of all tenancies which are in RPZs. HICP averaged 0.73 per cent over the past three years.”

The Department added that for those outside of RPZs, the provision for bi-annual rent reviews will be extended for an additional three years from January 1st, 2022 to December 31st, 2024. “This provides rent certainty for tenants outside of RPZs for a minimum two year period at a time,” it said.

Minister for Housing Darragh O’Brien said the 4 per cent cap on rent increases in RPZs had become “a target rather than a limit” for landlords.

“We are now taking action to ensure that tenants will only pay rent increases, if required to, which are in line with general inflation, which is currently below 2 per cent,” he said.

Mr O’Brien said the Bill will also restrict the level of upfront payments required of tenants, to a total value that does not exceed two months’ rent to cover any deposit and one month rent in advance.

“We are also extending protections for those most impacted by Covid-19, in arrears and at risk of losing their tenancy,” he said. “Such tenants will be protected from rent increases and/or evictions to January 2022.”

The changes to the law will take effect upon the passage of the Bill, which is expected by July 9th.

Sinn Féin housing spokesman Eoin O’ Broin described the reforms as “closing the gate after the horse has bolted”, and “too little, too late”.

“The Minister’s plans to keep the RPZ legislation is place, while limiting increases to inflation will do little to help tenants already struggling with high rents,” he said.

“Furthermore, what about the 26 per cent of tenants who live outside rent pressure zone areas? Those tenants will still be subject to the current system, which is deeply unfair.

“If this Government is serious about protecting renters, it will ban rent increases for three years for all new and existing tenancies. In Budget 2022, it should also introduce a refundable tax credit for renters, which would help reduce rental costs.”