The issue of rising rents has been an ongoing one in Ireland now for many years, particularly in the major urban areas.
With new building still well below the levels required and the number of properties for sale on the market also lagging behind what is deemed to be ‘normal’ that’s a problem that is unlikely to subside any time soon.
The matter is particularly pressing for those looking to save for a home of their own as the high rental repayments mean they are unable to meet the deposit requirements set out by the Central Bank, even with the introduction of the Government’s new Help-to-Buy scheme for first-time buyers at the start of the year.
In order to alleviate the problem rent caps, which limited rent hikes to 4% for the next three years, were brought into effect in Dublin and Cork late last year.
Now Galway and commuter belt towns could be set to have them enforced too to ensure those people travelling into our cities for work purposes don’t end up paying a higher price than those living closer to the major urban centres.
According to reports in today’s papers up to 20 new towns could see the rent caps introduced this year, with this figure possibly even doubling if Fianna Fáil get their way.
Whatever the final number of locations is, it is expected that Housing Minister Simon Coveney will reveal the new rent pressure zones before the end of this month.
For towns to be designated as a pressure zone the average rents have to be above the national average and prices must have increased by 7% in four of the last six quarters.
Landlords can increase rent by only 4% a year for the next three years in designated zones. The Housing Agency is believed to have identified electoral areas in Cork and Galway where rent caps need to be introduced.
A number of areas in counties along the Dublin commuter belt are also expected to be designated. According to reports, Navan in Meath and Naas in Kildare met the criteria, as has Carrigaline, Ballincollig, Douglas and Rochestown in Cork.
Towns in Limerick and Waterford are not expected to see rent caps introduced following the outcome of the Housing Agency’s review but could be designated as pressure zones in a future audit.
Whether the proposed rent caps help stabilise rents or not remains to be seen. Either way many of the same old problems in relation to property will still remain. Whether renting or buying, the stock is not there to meet demand in our major towns and cities and until this is resolved expect property and rental prices to continue to remain high.
Let us know your thoughts on the new proposals.
- Do you think the rent caps are a good idea?
- Should they be limited to certain areas or expanded nationwide?
- What other ideas would help keep rental costs down?
Have your say below…