Government agrees plan to tackle rent increases

The coalition is to stop landlords from raising rents every year and will limit rises to once every two years.

After a climbdown by Environment Minister Alan Kelly to link rent rises to inflation, Fine Gael and Labour agreed on the plan last night.

This plan has been weeks in the making, initially earmarked to be announced with the Budget, but Fine Gael and Labour couldn't come to an agreement in time.

It even led to reports of major rows between Environment Minister Alan Kelly and Finance Minister Michael Noonan.

The plan, that needs final approval from the Cabinet next week, sees Alan Kelly's promise to give rent certainty by linking any rises to inflation, abandoned.

Instead the current practice of annual rent reviews will be changed to a review every two years, and will last for at least the next four years.

Any increases will also only be allowed at the market level.

Also included in the package are efforts to get more apartments built in Dublin, and 100% tax relief on mortgage interest where landlords rent to those receiving assistance.

The Father Peter McVerry Trust has welcomed the move towards rent certainty, but CEO Pat Doyle has said the law needs to be changed quickly to avoid landlords hiking prices while they still can.

“It will allow some of the other initiatives such as the NAMA Housing stock that is coming into play and the Ministers own capital housing building programme,” Mr Doyle said.

“It will allow all those initiatives to take place and it will calm the market down. The key issue here for us, they need to rush the legislation through immediately in order to make sure there isn’t a spike and a rise in rents.”