Some landlords are not complying with rules restricting rent increases in rent pressure zones, the Residential Tenancies Board (RTB) which regulates the sector has acknowledged.
Interim director Pádraig McGoldrick was commenting on the 7 per cent annual increase in rent levels indicated in the rent index for the second quarter of 2021. He said the figure was based on rent levels in all new private tenancies registered with the tenancies board.
“While there are legitimate reasons reflecting such a rate of increase, we are also aware of a level of non-compliance by landlords with rent-setting regulations restricting rent increases in RPZs [rent pressure zones],” he said.
“The RTB is committed to ensuring increased compliance with these requirements,” Mr McGoldrick added.
Mr McGoldrick was responding to Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers (IPAV), who claims the data on rents "isn't fit for purpose".
Mr Davitt said the figures compiled by the board and the ESRI do not differentiate between new and existing rental stock, or between properties that are inside or outside the RPZs, making it impossible to determine which category of tenancy is driving this inflation.
“The inference taken from the headline figure of 7 per cent growth in rents is that large numbers of landlords are defying the RPZ rules,” he said. “And the truth of the matter is that, without more granular data, we simply do not know.”
According to the latest update, rents rose at an average annual rate of 7 per cent to stand at €1,323 per month nationally and €1,848 per month in Dublin. Mr Davitt says the data should carry a health warning “in relation to the conclusions that can be drawn from the level of increases in rents”.
Breakdown
Mr Davitt wrote to the RTB last month seeking a more detailed breakdown of the figures. No breakdown was provided in the response from the board.
Mr McGoldrick said the index was based on the actual rents being paid for rented properties across Ireland and was made up of new tenancies, inside and outside RPZs. This includes new rental stock never let before; new tenancies in existing rental stock; and new tenancies in properties that have not been let in the immediate two years prior to this tenancy.
The latest report indicated that 14,140 new tenancies were registered during the second quarter of 2021.
However, Mr Davitt said categories one and three are exempt from the RPZ rules, even though they may be within a designated RPZ.
“Landlords offering such properties are free to charge whatever rent they can achieve, they are not limited to the 4 per cent annual increase which earlier this year was changed to the Harmonised Index of Consumer Prices,” he said.
Minister for Housing Darragh O’Brien is planning to bring forward legislation to cap rent increases at 2 per cent or the rate of inflation if it is lower than this under new housing reforms.
On whether, as the RTB contends, some landlords may be flouting the rules, Mr Davitt said: “Such speculation is unhelpful and it’s fomenting political and other public pressure on the back of insufficient data.”
He said priority should be given to producing more detailed data.
“The RTB has previously indicated to me that they have plans in place to capture this data but the project needs to be treated as a priority, It is essential for the integrity of public information and policy formation,” he said.
