An organisation for landlords has welcomed signals that the government may reverse the ban on bedsits.

Taoiseach Enda Kenny should declare a national emergency on rent and housing, a leading homeless campaigner has said.

Finance Minister Michael Noonan has confirmed that senior civil servants are working on proposals to regulate the house-rental sector and which will be considered by the cabinet before the budget.

Environment Minister Alan Kelly’s plan to cap surging rent rises will create a “black market” economy where would-be renters will be effectively forced to make “under the counter” payments to secure homes, landlords have warned.

The Government has been urged to incentivise tenants to move to rural areas or lift the blanket ban on bedsits instead of imposing de facto rent controls on properties.

Almost 40,000 households rushed to register with Irish Water on Monday to fulfill its February 2 deadline, according to the utility company.

Concern that Irish Water could pressure landlords to hand over former tenants’ PPS numbers has led TDs to demand an intervention by the Data Protection Commissioner.