Spiralling rents are 'absolutely not my fault', claims minister
Published 18/11/2015 | 02:30
Environment Minister Alan Kelly has denied that a Government squabble over rent certainty led to landlords hiking rates - despite a new report showing rents have risen at the fastest rate since the economic crash.
Economists are directly linking the talk of rent controls to the hikes in prices.
But Mr Kelly blamed "complex issues" for the delay in the announcement of the housing package. The plan was originally expected to be made on Budget day but was only finally agreed last week. It restricts landlords to a single rent increase every two years.
The minister said he could "absolutely not" have prevented rents going up by a nationwide average of 3.2pc between July and September.
Economists had warned that introducing a rent freeze would prompt landlords to pre-load rises ahead of the Government passing legislation.
The latest daft.ie survey shows that those who rent a house are having to pay out €82 more per month than a year ago.
Daft.ie economist Ronan Lyons - who is also a lecturer in Trinity College Dublin - said the rental report suggests that "the market reacted to talk of rental controls".
Mr Kelly said he had read the report but added that "there's huge evidence out there that these increases of 10pc or more were coming down stream".
"I have a huge amount of analysis that has come into my department that has shown that that is going to happen.
"We predicted this was going to come true, that's the reason we took the measures that we did last week in order to give people better certainty in their tenancy, and to bring along supply measures," he said.
The Union of Students in Ireland said yesterday that the crisis could push students out of the rental sector and away from third-level institutions.
"While the two-year rent freeze reform from the Government will provide rent certainty for both tenants and landlords, and this scheme could benefit students because they will be less likely to move into a place and then be forced to move or fork out more rent; it is not as beneficial for students moving out of their family homes, as they will still be hit with increases," said Kevin Donoghue, President of the USI.
Fianna Fáil environment spokesman Barry Cowen said the surge in rents was a result of Mr Kelly's "botched handling of rent certainty".
"It is no coincidence that the largest rent increases in over 10 years were recorded when Minister Kelly was fumbling and fooling with rent controls," he said.
Asked whether faster action by himself and Finance Minister Michael Noonan could have prevented the massive hikes, Mr Kelly replied: "There are complex issues here that are broader than the two names you mentioned, there was an awful lot of legal advice through the Attorney General.
"I mean, we did this package as quickly as is possible and it's a comprehensive package, and I'm glad that we delivered a comprehensive package and not just a piecemeal package.
"There's a huge amount of supply measures and a huge amount of rent measures and they will help," he said.
The minister reiterated that supply is the "real issue".
The Dáil last night debated a call for "all necessary resources" to be used in comprehensive plan to tackle the housing emergency.
The motion, put down by the Anti-Austerity Alliance, sought the transfer of Nama funds for more social and affordable housing, the introduction of rent controls linked to the Consumer Price Index, and a ban on 'economic evictions'.
The Government opposed the proposal.