Rent measures a 'disaster', says landlord association

Updated / Thursday, 1 Jul 2021 14:41

Darragh O'Brien said the new rental measures are probably the most significant changes in terms of tenancies and rents in at least five years

By Cian McCormack

A property owners' association has dubbed a Government measure to link rent to general inflation as "a disaster for landlords and tenants", while a homeless charity says it will save families from ending up without homes.

The Irish Property Owners’ Association said the measures introduced by Minister for Housing Darragh O’Brien are not workable.

Speaking on RTÉ's News at One, the association's spokesperson Margaret McCormick said: "Harmonised indices of the consumer price index does not reflect the cost of the provision of accommodation. It is not going to be workable."

"22,000 tenancies have gone since they introduced rent pressure zones. The rent pressure zone rules took no account of the level the rent was set when they were introduced or the indebtedness of a landlord," she said.

Homeless charity Simon welcomed the measures, but emphasised more needs to be done to tackle homelessness.

New measures to see rent increases linked to inflation

Also speaking on News at One, Simon Communities of Ireland national spokesperson Wayne Stanley said: "This is really is a positive thing. It will link increases in rents more in line with what people are seeing in terms of their pocket - their income.

"This will mean that we won't see the huge increases in rent that were driving families in to homelessness over the last ten years."

However, Mr Stanley said the Government's rental measures will not insert affordability into the housing market.

"We are hoping that in the minister’s housing plan - which will be launched later this month - that we will see innovation and that we will see the State stepping in and inserting affordability into the system. That is also going to have to be reflected in the Budget in October. There is a huge amount of work still to be done," Mr Stanley added.

"There are more than twice the number of homeless today than there was in 2014 and that is in the context of a significant reduction, driven by a moratorium on eviction that was brought in because of Covid-19. That moratorium has now been lifted."

Minister O'Brien said the Government’s new rental measures are probably the most significant changes in terms of tenancies and rents in at least five years.

The new measures will see rent increases linked to general inflation and an extension of rent pressure zones to the end of 2024. The provisions will likely take effect by 19 July.

The current cap of 4% on rent increases in Rent Pressure Zones will be replaced.

Rents will now be linked to general inflation, as measured by the Harmonised Index of Consumer Prices, which is a model followed by EU countries.

Any rent increase will be linked to the rate of inflation at the time of a tenant's rent review.

The level of inflation Ireland is expected to be 1.7% this month.

All Rent Pressure Zones are set to be extended until the end of 2024.

For tenancies outside of those areas, the current provision, which restricts rent reviews to every two years, will also be extended to the end of 2024.