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Home & Property

Threshold calls for enforcement of rent pressure zone legislation

Wednesday, 29th November, 2017 5:27pm

Rent pressure zone (RPZ) legislation needs to be properly enforced if it is to be effective in stabilising the rental market in Ireland while large-scale new builds are awaited, according to national housing charity, Threshold.

Its chief executive, John-Mark McCafferty, was responding to last week’s Rental Price Report, which covers the third quarter of 2017. The report indicates an 11.2 per cent increase in rents nationally, to an all-time high of €1,200.

However, an easing in the annual rate of rental inflation, from 13.4 per cent at the start of 2017 to 11.2 per cent at present, was revealed.

"This is a remarkable achievement in a market of limited supply, which, we believe, is down to rent pressure zones beginning to make an impact," Mr McCaffrey contended.

"This trend was also seen in the Residential Tenancies Board (RTB) Rental Index Report in Quarter 2, 2017. Rent pressure zones have provided much needed relief to many tenants who were facing unsustainable rent increases and possible homelessness," he said.

Fear of homelessness is a real issue for many of Ireland’s renters, the Threshold chief said. Of the 5,500-plus people who contacted Threshold’s Tenancy Protection Service so far this year, 43 per cent queried rental terminations, while 19 per cent enquired about rent reviews and rent increases.

"According to The report, there were only 3,365 properties available to rent nationwide on 1 November. While the development of large-scale housing projects is the only long-term solution to the housing crisis, it will take time to increase the supply of affordable homes for low to middle income tenants," Mr McCaffrey said.

"Until supply can be significantly ramped up, we believe the best way to stabilise rent inflation is by robustly policing and enforcing the RPZ legislation. This, in turn, will help to stabilise the rental market. There is no excuse for the construction industry not to immediately start to build, as new developments are not covered by RPZ guidelines."

Under the RPZ law, a new tenant can only be charged four per cent more than a previous tenant. The landlord must explain in writing to a new tenant the calculations behind the rent, as it relates to the RPZ formula. This legislation gives sitting tenants and those searching for accommodation equal rights.

However, Dr Aideen Hayden, Threshold Chair, said that contacts from clients indicated that some landlords are finding ways to circumvent the legislation.

Threshold has again called on the Government to introduce a publicly accessible rent register, along the lines of the Property Price Register. This, it said, would provide potential and sitting tenants with the details needed to make informed choices or to challenge illegal rent increases at the Residential Tenancies Board (RTB).

In a competitive market with limited supply, tenants are hesitant to challenge rent increases at the RTB for fear of a relationship breakdown with the landlord, Dr Hayden said.

Threshold has asked Housing Minister Eoghan Murphy, to put a timeline on the introduction of a legal definition for ‘substantial renovations’, which, it said, is being used by some landlords as a reason to terminate tenancies or to increase rents beyond the RPZ limit.

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