Rents in pressure zones 'could go up by 8%' due to loopholes

Dr Rory Hearne says linking rents to inflation seemed like the right move at the time
Jack Quann
Jack Quann

13.53 30 Nov 2021

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Rents in pressure zones 'could...

Rents in pressure zones 'could go up by 8%' due to loopholes

Jack Quann
Jack Quann

13.53 30 Nov 2021

Share this article

Renters could face higher increases than new limits being introduced by the Government.

New legislation - limiting the rise in Rent Pressure Zones to 2% or the rate of inflation - is due to pass in the coming weeks.

However it has emerged that if rents have not been increased in a number of years, a landlord could combine the increases in one year.


Assistant professor in social policy at Maynooth University is Dr Rory Hearne.

He told Lunchtime Live linking rents to inflation seemed like the right move at the time.

"The Rent Pressure Zones were brought in in 2016 to try and put some sort of control on rents, and the limit was set at 4% a year.

"What was interesting was that when you actually looked over the years - from 2016 to now - rents probably should have increased in a region of 16% to 20%.

"But they actually increased by over 30%, which showed issues with the caps actually working.

"Given the rents increased so much, there were a lot of proposals that rent should have been linked to inflation.

"And so the Government, in a positive move, said 'Yes we'll link it to inflation'.

"But what happened in the last six to eight months is, of course, inflation has gone through the roof - and we're seeing costs rise everywhere."

Dr Hearne explains: "We're in a situation currently where landlords can increase the rent up to close to 5%, given the current inflation level.

"So what the Government is doing is linking the increase back to 2% - or whatever the inflation is."

'Utterly flouting the rules'

However he says there are loopholes to these rules.

"One of them is if you haven't increased the rent last year or previous years you can compound it.

"So you could be seeing people with rents increasing anything up to 4%, 6%, even 8%.

"There are other loopholes as well: the new cap will not apply to any new property that's being developed or let.

"Loopholes also exist around if a landlord is refurbishing a property; they can then let it out at new rents.

"There is a real issue that some landlords are utterly flouting the rules.

"And even when there's a change of tenancy, when the landlord is supposed to let the new tenants know what the previous rent was - and not increase the rent more than the Rent Pressure Zone cap - the landlord is actually increasing the rent to a significant amount".

And he says some tenants are told the property is being sold and are given notice to quit.

"They leave and then suddenly just a new tenant is paying a much higher rent.

"So we have a real problem that tenants are really suffering - I know there's a lot of landlords as well who are saying they are struggling."

And he says the Government has been focused for too long on the build-to-rent sector.

"They ignored renters and the rental system largely, aside from the tax measures and the supportive measures for the build-to-rent developments.

"And they kind of just ignored the rental system outside of that, from my looking at it".

Main image: Close-up of man opening door to a new house. Picture by: SeventyFour Images / Alamy Stock Photo

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