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Tuesday 25 October 2016

Tenants warned of 'time bomb' when rent freezes end

Published 10/09/2016 | 02:30

Tenants have been warned they face a “rental time bomb” when a price freeze expires next year.. (Stock photo)
Tenants have been warned they face a “rental time bomb” when a price freeze expires next year.. (Stock photo)

Tenants have been warned they face a "rental time bomb" when a price freeze expires next year.

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Rents have now risen for 50 months in a row. They were up 9pc last month, according to figures from the Central Statistics Office.

The ongoing rises mean that rents have shot up by 46pc since January 2011.

One in five households rent, with the numbers surging lately due to house price rises and the difficulties younger people have in getting mortgages.

Economist with Goodbody Dermot O'Leary warned tenants they face more sharp rises.

He said the cumulative increase in rents was 46pc over the past five-and-a-half years, compared with a 5pc increase in consumer prices overall.

He said house prices had risen by 8pc over the same period.

"Coming to the one-year anniversary of the government-imposed rental freeze, it is clear that the underlying upward pressure on rents remains, thus tenants are in for a substantial increase when their two-year freeze expires.

"With available properties to rent remaining at exceptionally low levels, further rent increases are likely," Mr O'Leary warned.

Legislation limiting rent increases to every two years came into force last November. But critics say this has done little to take the heat out of the market.

The latest rental report found rents were at their highest level on record. Rents were almost 10pc higher than they were a year ago in the second three months of this year.

Daft found the number of properties available to rent continued to decline, with a little over 3,600 available across the country at the start of August. Just 1,100 of these properties were in Dublin.

The State's Rental Tenancies Board now has a total of 324,000 tenancies registered, representing 172,000 landlords and 705,000 occupants.


Meanwhile, housing associations said they were ready to deliver 5,000 housing units by 2018.

The Irish Council for Social Housing (ICSH), the national representative body for housing associations, said its members were using State funding and private financing.

Director of policy at the ICSH Caren Gallagher said: "With a development pipeline of over 5,000 homes in train by 2018, using State funding together with leveraging private investment, housing associations must be seen as a long-term strategic and collaborative partner in providing and managing new homes."

She said 2,400 homes for families, people with disabilities, older people and formerly homeless households were accommodated by housing associations in 2015.

Irish Independent

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