AREAS with rising rents, such as Dublin and Cork will be targeted by the new rental strategy of the government. The zones of rent pressure, recognizing areas where there is a long-lasting tension within the rental market will be recognized through the Residential Tenancies Board (RTB) in the framework of the strategy.
A statement by Simon Coveney's Department of Housing said that pressure zones will be implemented immediately within areas of four Dublin Local Authority Areas as well as in Cork city.
What Happens When Pressure Zones Are Flooded?
The rules will limit rent increases within the designated zones at 4 percent annually for a period of three years.
The department says, "These are areas where annual rent increases have been at 7% or more in four of the last six quarters and where the rent levels are already above the national average."
The measures are coming into effect immediately in all four council areas within Dublin and Cork city. The announcement from this afternoon is:
The new policy will also increase the power and authority and powers Residential Tenancies Board to provide better support and services to landlords and tenants.
Despite the demands of parties like Sinn Fein and the Social Democrats, The new rental strategy doesn't include a national system of rent control. Rent control for unspecified periods was not considered a possibility - because it was believed that such a measure could undermine efforts to build a viable rental industry.
The concept of 'pressure zones' is an individualized, time-bound system to ensure reliable rents in high-pressure areas.
The new rules follow changes made in the last year by then housing Minister Alan Kelly, which included longer notice periods in the event of rent increases as well as a two-year limitation on how often rents can be evaluated.
Since the beginning of this year, rents have continued to rise. In the last twelve months, rents have increased by 8.6 percent across the nation in accordance with the most recent figures released by the RTB.
Incentives Reduced:
Coveney's plans are being announced in a formal press conference in Government Buildings at the moment and have already been criticized for their potential to cut the availability of food in certain regions.
In a note of briefing this early in the morning Goodbody analysts Colm Lauder and Eamonn Hughes noted that previous rent restrictions meant that there hadn't been price hikes at many properties over 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-to-market'," they claimed.