Rent control unlikely to materialise

The Labour Party has confirmed that proposals by Environment Minister Alan Kelly for rent controls to be linked to the rate of inflation are unlikely to be introduced by the Government.

However, suggestions beefed-up regulations to protect tenants are instead being examined have prompted landlords to warn that investors will flee the Irish property market.

There is speculation the slimmed-down package may be agreed by next week, which will make it harder for landlords to raise rents and evict tenants. This could include new rules where landlords must supply proof from neighbouring leases on why rates should be increased. While Government sources refused to confirm the new package, the Irish Property Owners Association (IPOA) warned such a move would hit the housing supply.

IPOA chairman, Stephen Faughnan, said: “Tinkering around the edges by lengthening the time for rent increases and looking for three comparable properties will not change the fundamentals of landlords exiting the sector, reducing the supply of rental accommodation, and will not provide more accommodation for people currently homeless.”

Some landlords claim that they will leave the Irish property market if stronger protections for tenants are introduced.

With agreement on a housing package looking likely to be announced until next week, a Labour spokesman admitted last night that Mr Kelly’s original hopes for rent certainty were now unlikely to proceed.

Mr Kelly wants rent increases linked to inflation for several years to stop rates soaring, but the Labour minister has faced opposition to the plans from Fine Gael in Cabinet.

Following yesterday’s weekly Cabinet meeting, a Labour spokesman said the model where rent is linked to the consumer price index was “unlikely to materialise”.

He said there would be “other measures” to provide solutions to the housing supply. This could include legislation which would be fastracked if needed, he said.

However, amid suggestions of stricter protections for tenants, the IPOA claimed that investors might leave the market.

“Lengthening the time for termination is just another ploy that will result in less people considering investing in property and more investors leaving the market sooner rather than later,” said Mr Faughnan. “The Government’s threatened interference in the market has already reduced confidence.”

Taoiseach Enda Kenny yesterday said a package to address the housing shortage is close to being agreed. Focus Ireland said hundreds of families face being left homeless by Christmas unless immediate action is taken to increase supply and address soaring rents.

Fianna Fáil leader Micheál Martin said rents were being hiked up while ministers squabbled over the issue: “The indecision of the Government is creating further instability in the rental market, with landlords shoving up rents to get in ahead of whatever proposals emerge from Cabinet.”

“Rents have been increasing and are spiralling out of control, which means families are being evicted as we speak.”