Minister for Housing Simon Coveney has confirmed he expects the rent cap scheme, under which landlords are limited to 4 per cent increases each year, to be extended before the end of the month to 15 additional local electoral areas.
Mr Coveney said the scheme currently in operation in Dublin and Cork city is likely to be extended to areas in commuter counties near Dublin, parts of Co Cork and parts of Galway, Limerick and Waterford cities.
“What’s happening is that by the middle of next week I should have recommendations coming from the Housing Agency on areas that they are recommending that we should assess in detail using data from the Residential Tenancies Board to become designated as rent-pressure zones,” he said.
“The indications are that I will get recommendations for about 15 or 16 local electoral areas. We can now get data on rent increases for local electoral areas rather that just entire local authority areas so we can break it down into much smaller areas to see what is happening with rents.”
The Government could only designate Dublin and Cork city as rent-pressure zones before Christmas because they were the only entire local authorities that qualified on the two criteria of rents being above the national average and annual rent inflation of at least 7per cent for four of the last six quarters.
Double benchmark
“We think that’s a very good double benchmark for saying there is a sustained problem in terms of rent being too high and going up too quickly, but we are now breaking down the assessment into much smaller areas to get a more accurate and exact picture,” said Mr Coveney.
“So, for example, if you previously looked at Meath – Meath as a county when you aggregate all rents wouldn’t qualify, but when you look at the town of Navan and the local electoral area that it is in, and the situations with rents there, it has a reasonably good chance of qualifying.”
He said media reports of 20 to 25 towns or suburban areas qualifying stemmed from the fact that some of the local electoral areas contained two or more towns, as was the case in the Carrigaline-Ballincollig area in Co Cork.
“Twenty isn’t a hard and fast figure for the number of towns that will qualify but you can expect that 70-80 per cent of the recommended 15-16 areas will be approved, so you are likely to see between 20 and 25 towns being designated as rent-pressure zones before the end of the month.”
However, he said he was not giving out the names of these 20-25 towns at this stage because he did not want landlords panicking and looking for ways to increase rents or get tenants out of their properties , which some might do if there was a long gap between naming and designating the towns.
