The Government will introduce a cap on inflation-linked rent increases, Housing Minister Darragh O’Brien has said.
he Irish Independent revealed earlier this week that with rent linked to surging inflation, the recently introduced policy by Mr O’Brien had backfired.
Inflation is currently at 3pc and rising. The previous annual rent cap was 4pc, and economists believe it is likely inflation will reach that level in the near future.
A cap will be placed on how much rents can rise in line with inflation to combat this, the Housing Minister said.
However, he did not go into detail as to what percentage this cap will be at, and said it had not been decided.
Mr O’Brien has said the Government wants to “give renters a break” and this is why rental pressure zones were extended, as well as linking rents to inflation.
The Minister acknowledged that inflation figures are higher than expected and due to this, a cap will be instituted, with his department and the Attorney General to determine an appropriate limit in due course.
The move will be brought before the Oireachtas during “this session”, Mr O’Brien said.
Minister O’Brien said inflation will likely continue to increase as the economy recovers from Covid-19 and people return to work, so this cap is a way of combating rising rents.
This cap will apply only in rent pressure zones.
Writing in the Irish Sun today, Minister O’Brien said the new rental system proposed in the Government’s Housing For All plan has “fair rent and certainty for tenants at its heart”.
Mr O’Brien said measures in the plan include putting a cap of one month’s deposit and one month’s rent in advance before a tenancy has commenced to put an end to landlords asking for upfront payments.
The Minister said there will also be 18,000 cost rental homes supplied, which will be “at minimum” of 25pc below market value. The tenant will cover the cost of “delivering, maintaining and managing the home only”.
Mr O’Brien said the Government was “changing the rental system” by introducing state-backed, secure and “below-market rents for working people”.