There are reports today in The Irish Times and Irish Independent that new rent control measures are being proposed by the Minister for Housing, Simon Coveney, today which would create “rent pressure zones” limiting uplifts in these areas to 4% per annum or 12% over three years.
The designation would last for three years. In addition, despite contrary comments by the Minister in recent weeks, it is now understood that the previous 24-month rent review limit introduced last year will continue outside of these newly designated zones.
In the new plans, the RTB (Residential Tenancies Board) will assess whether rents in a particular location have increased above “market levels” for 12 of the last 18 months. If so, they could then be designated as “rent pressure zones” and the 4% per annum cap is implemented. It is unclear as to what the “market level” benchmark or definition would be.
Dublin apartment rents have risen by 9.6% year on year to third quarter 2016 according to the RTB themselves, therefore that is the “market level”. Zones will likely be designated along local electoral areas and the caps will not apply to newly built properties, recently renovated or formally vacant stock.
In addition, the measures aim to increase the level of inspections of private rented stock to 25% and while this is a welcome measure to improve standards, it may result in landlords at the lower-end of the market pulling stock rather than spending to bring up to the required specification.
According to Goodbody Stockbrokers, "The previous rent controls limited reviews to every 24 months meaning that many rents have not been reviewed for a significant period of time while market rents have appreciated considerably. As a result, large swathes of the residential lettings market would be technically under-rented, yet the landlord unable to ‘mark-tomarket’. We see this as damaging to professional landlords operating in the Irish market, and will provide reduced incentives to growing lettable stock."
Source: www.businessworld.ie
