Thursday 29 June 2017

Tenants in commuter belts won't benefit from rent caps - despite 'rent pressure zone' label

Minister Simon Coveney announces his plan for the rental sector. Photo: Doug O’Connor
Minister Simon Coveney announces his plan for the rental sector. Photo: Doug O’Connor

Paul Melia and Dr Mick Kerrigan

Despite living in high rent areas that would qualify as 'rent pressure zones', many tenants in the commuter belt of Dublin and parts of Galway city won't benefit from any cap on their rents, it has emerged.

An analysis of data from the Residential Tenancies Board (RTB) shows that households in parts of Kildare, Meath, Wicklow and Galway city paying more than the average annual national rent and hit with steep hikes over the last 18 months will not get any protection from unscrupulous landlords.

This is because it is only households in both Cork and Dublin city that will benefit from the measures announced under the Government's 'Strategy for the Rental Sector'.

This is despite the long-awaited strategy promising to develop a "viable and sustainable" sector which would provide "security" for households.

Part of the package includes limiting how much rents can be increased in designated 'rent pressure zones' - but these cover just Dublin and Cork cities and will not be extended to other areas until at least March.

The proposal, expected to become law by the end of the year, limits annual increases to 4pc in these cities for a period of no more than three years, if certain criteria are met.

Read more: All your questions on the new 'Rent Pressure Zones' answered

The criteria includes a requirement that annual rent increases have been at 7pc or more in four of the last six quarters, and where the rent levels are already above the national average of €973 per month.

The scheme was announced as part of a broader package on rents by Housing Minister Simon Coveney, who said that "dramatic rent inflation" was hurting families.

"Our rental sector is not delivering for tenants, landlords or the country," he said.

"We need a strong and viable rental sector as a long-term tenure of choice for families and as a secure investment environment for landlords.

"Dramatic rental inflation puts families under pressure and damages our national competitiveness and stability in the investment environment.

"We need to tackle the consequences and alleviate short-term pressures and we need to address the long-term causes by delivering increased supply."

An analysis of rental data from the Residential Tenancies Board shows that families living in many areas hit with crippling rent hikes in recent years will not benefit. Families renting in Salthill in Galway, paying an average of almost €1,000 a month and hit with hikes in the last 18 months, will not be protected by the new measures. Four towns are affected in Kildare; Kill, Maynooth, Naas and Sallins. In Meath, families in Ashbourne, Dunboyne, Ratoath and Stamullen will not benefit, nor will those living in Wicklow town and Delgany in Wicklow.

More than 20 towns saw rent hikes of more than 20pc in the last 18 months, including Monivea in Galway, where they rose 49pc, Bailieborough in Cavan, where they increased by 29pc, and Kenmare in Kerry where they increased by 24pc, also lose out.

They won't benefit as rents are below the national average.

The most recent report from the RTB shows that rents continue to rise, and grew by 2.3pc in the last quarter of this year.

Read more: Mortgage arrears fall but thousands remain in a debt straitjacket

The Government hopes that legislation to allow Dublin and Cork be designated as rent pressure zones will be introduced before Christmas. A spokesman for the Housing Department said that areas experiencing pressure could be added to the list from March following an analysis by the RTB.

"The situation is worse in Cork and Dublin cities and other areas will be included as soon as possible," he said, adding that the process would take a "number of weeks".

Areas in Dublin and Cork could also be de-designated if it was found that rents were not rising in line with the criteria, or monthly payments were below the average, he said.

Irish Independent

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