The housing minister has been asked to intervene after it emerged that some tenants are being asked for two months’ rent as a deposit.
Responding to reports that Ireland’s largest private landlord is asking tenants for the money, Labour spokeswoman on housing, Jan O’Sullivan, called on the minister, Eoghan Murphy, to urgently refer the case to the Residential Tenancies Board to check the legality of charging a double month’s rent as a deposit.
Leasing company, Irish Residential Properties Reit (IRES), owns around 2,400 apartments in the greater Dublin area.
“The Government needs to urgently move to test the legality of the practice of Reit before it becomes the norm, and renters who are already being squeezed by a tough market suffer even more,” Ms O’Sullivan warned.
Earlier this month, the Dublin Tenants Association held a protest outside the IRES head offices to draw attention to the rising cost of renting and to highlight vulture fund activity in the housing market.
The Labour TD added that the Government has now been presented with a real opportunity to implement the deposit retention scheme that was legislated for in 2015.
“Labour fought hard to secure this new scheme and it is disappointing that Fine Gael is dragging its feet on this much-needed protection that is common in many other countries,” said the Limerick TD.
“Minister Murphy could use this legislation to bring in regulations to prohibit companies like REIT from charging sky-high rates to tenants who wish to secure their properties.”
It comes as the governor of the Central Bank defended measures introduced by both the Government and the bank by claiming soaring house prices are simply a reflection of a growing economy.
Rapidly rising house prices have been blamed on the decision of the central bank to relax its lending rules for first-time buyers as well as the Government’s help to buy scheme.
However, Central Bank Governor Philip Lane said: “The idea that there is a bubble and the only thing that moved was our rule — what has really moved is the economy.”
“Employment growth in the economy is very strong. The fundamentals of any housing market are employment growth, income growth and interest rates. Policy rates are low, market rates are low.”
Mr Lane said in an interview that, in “the absence of other market opportunities”, there are now “a lot of people with a lot of cash thinking property is the best use of their savings”.
“So you have a situation where there are a lot of factors contributing to the increase in property prices,” he said.
Back in 2015, the central bank tightened deposit rules by requiring first-time buyers to pay a 10% deposit for the first €220,000 of the property and 20% on the balance.
However, this 20% requirement was eased.
Mr Lane said: “When we looked at the data last year, only 11% of first-time buyers above €220,000 were being hit by our rule.
“So we decided to simplify the rules so that it was 10% for all first-time buyers to reflect a reality that not everybody above €220,000 was being bound by our rules.”
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