Housing minister: 'I'm not remotely scared of institutional investors'

Darragh O'Brien, the housing minister, said of the rent cap: 'The 2% is not a target at all: 2% is the ceiling.' Picture: Gareth Chaney/Collins

The housing minister has said he is "not remotely scared of institutional investors", after publishing legislation to cap rent increases at 2%.

Darragh O'Brien had linked the rise in rents to inflation, when he scrapped rent-pressure zones in July, but with inflation now outstripping the previous 4% limit, another move was necessary. 

At Cabinet, it was agreed that legislation could proceed to limit rent increases to 2% or follow the Harmonised Index of Consumer Prices (HICP), whichever is lower.

On a visit to University College Dublin (UCD), Mr O'Brien said the 2% figure is "a ceiling" and defended not imposing an outright freeze on rents, saying that his move would "prevent flight from the rental sector, particularly of mom-and-pop landlords". He said that he has not made the decision to allow rent increases out of fear of investors.

"I'm not remotely scared of institutional investors," Mr O'Brien said. "If I could say this: I banned bulk buying as well and we've seen two decisions from An Bord Pleanála very recently, based on the legislation that I brought forward, where conditions of planning banned bulk buying within housing estates.

"Do we need investments in this country? Of course we need investment in the country, and in the right places and where it is appropriate. There are those who say we don't need investment. That's just not true. The Exchequer can't pay for everything. But the Exchequer is the biggest investor, the State is the biggest investor, with over €20bn between now and 2026 in housing measures, and affordability measures in social housing.

"So, I have no fear of institutional investors, I can tell you."

Mr O'Brien also defended flagging the cap in advance, and said he did not believe that landlords would use the time between now and the law being enacted next month to increase rents.

"I think everyone is acutely aware — and I am, maybe, more than a lot of people — of the stresses that our renters are under," Mr O'Brien said. "I'm bringing forward measures because I think rents across the board are too high. And we'll address that by supply. But, in the meantime, bringing in a 2% or inflation, whichever is lower, is a really significant move. And that will positively affect about 75% of our renters.

"You have got to make sure that the measures brought forward are calibrated and are not going to lead to any unintended consequences of further flight from landlords.

"So, the 2% is not a target at all: 2% is the ceiling."

Mr O'Brien was speaking at the launch of 924, purpose-built student residences in the UCD campus, which were financed by the Housing Finance Agency. The new residences are comprised of a mix of 4-14 bed apartments, with en-suite study bedrooms and shared living room and kitchen, and 60 studio apartments for single or double occupancy. 

However, when asked if he believed that the apartments, which have a minimum rent of €835 a month, were affordable, Mr O'Brien said that he "was not saying that".

"What I would also say is, to all universities, that we need affordable rents for students and affordable rents, both on-campus and off-campus."