Murphy confirms plan to close rent increase loophole

There are widespread calls for the introduction of rent caps linked to the rate of inflation

Murphy confirms plan to close rent increase loophole

File Photo: The Housing Minister Eoghan Murphy at the launch of the Peter McVerry Trust Annual Report, 06-11-2017. Image: Leah Farrell/RollingNews

The Housing Minister has confirmed plans to close a legislative loophole which allows landlords to raise rents based on minor refurbishments.

Housing charity Threshold has warned that some landlords are flouting the government’s Rent Pressure Zone legislation through fraudulent use of a stipulation that allows rent increases following “substantial renovations” at a property.

The charity said that up to 12% of tenancies are ended by landlords misusing the stipulation based on minor renovations – and has called on the Government to urgently introduce a legal definition for what constitutes a “substantial renovation.”

Speaking this afternoon the Minister for Housing, Eoghan Murphy said work to close the loophole is already underway:

“As I announced in September, I will bring forward a definition – were at the final phases of clarifying that at the moment - to close that loophole,” he said.

“If that needs to put on a legislative footing we will do that as well.”

Housing crisis

It comes amid calls for major policy change to tackle Ireland’s housing crisis as two separate reports again highlighted spiralling rent and property prices.

The latest Irish Rental Price Report from Daft.ie has shown that the average national rent is now up around €12,000 – 16% higher than it was at the peak of the economic boom.

Meanwhile a new report from the Economic and Social Research Institute (ESRI) has warned that Irish house prices could rise by 20% over the next three years.

A number of opposition parties and housing organisations have warned that the government’s Rent Pressure Zone (RPZ) legislation is not working – and called for the introduction of hard rent caps linked to the rate of inflation.

"Cracking under the strain"

Addressing the Taoiseach in the Dáil this afternoon, the deputy leader of Sinn Féin, Mary Lou McDonald said life goals that were once seen as common are now becoming impossible – with people forced to put off having children because they cannot afford a home:

“People have told me that their relationships are cracking under the strain of the housing emergency,” she said.

“That for lots of people in their late 20s to mid 30s even the idea of starting a family now falls into the bracket of unaffordability.

“These Taoiseach are the very real human consequences for those struggling to get on the property ladder of struggling to pay their rent.”

Affordable housing scheme

The Labour Party meanwhile has called on the government to end its reliance on the private sector to deliver affordable new builds – and to introduce a national affordable housing scheme.

The party’s housing spokesperson Jan O’Sullivan said that even if the supply issue can be addressed “we need to ensure that the homes that are built are affordable to rent and buy.”

She again called for rents to be linked to inflation through the Consumer Price Index – or failing that for Rent Pressure Zones to be extended with increased security of tenure for renters.

“The shortage of supply has now become a crisis for those who are renting, those who can’t afford to buy and more specifically those who are homeless or at risk of homelessness,” she said.

“This is no time for business as usual.”

Rent caps

The Social Democrats called on the government to “stop pumping money into private market responses” and tackle the housing supply crisis through a major public housing programme.

The party’s co-leader Catherine Murphy also called for the introduction of hard rent caps nationwide.

“The soaring rents show how completely inadequate current rent certainty measure have proven to be,” she said.

“Rent caps don’t apply to the whole of the country and they apply too high a cap.

“We need to see rent caps tied to the general rate of inflation and applied across the country.”

Last week, figures from the CSO found that national property prices have risen by 13% this year alone.

The figures suggest that national prices have risen by 70% since their lowest point during the recession in 2013. They are currently 23.7% lower than at their peak in 2007 according to the figures.