Housing minister imposes 'absolute cap' of 2% on rent increases

Darragh O'Brien says new legislation will cap rents to either 2% or the consumer price index, whichever is lower

Mr O'Brien said the legislation would be finalised before Christmas and would give certainty to 'tenants and landlords alike.

The Housing Minister will bring legislation to Cabinet on Thursday to reset caps on rent increases.

Darragh O'Brien said the caps would be either 2% or linked to the consumer price index, whichever is lower.

Mr O'Brien 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 considered necessary.

Speaking in Dublin on Tuesday, Mr O'Brien said the legislation would be finalised before Christmas and would give certainty to “tenants and landlords alike”.

"Obviously, we've seen, over the last few months in particular, rents continuing to increase. At Cabinet this Thursday, I'll be bringing a further piece of legislation forward to bring an absolute cap on rents at either the CPI or 2%, whichever is lower, which I think is a significant change and a significant move, along with legislation to bring forward tenancies of indefinite duration.

"It's important that it's there. I would remind people as well that when I brought forward the original rent caps in July, I did say at the time that inflation was on an upward trajectory, which we've seen right across Europe, and indeed across the OECD."

Mr O'Brien said the housing and construction industry would have to play its part in this Thursday's Climate Action Plan, saying the challenge faced will be in retrofitting existing homes and tackling the issue of vacant homes across the country.

"The big challenge will be in relation to vacancy and that's where we can have a very significant role in providing homes for people that don't all need to be new builds. We need to look at existing stock and get that back into use."

Mr O'Brien was speaking at the launch of a new campaign by the charity Threshold. It is aimed at encouraging renters to know their rights. A survey from Threshold found that:

• 43% of renters say they have experienced an unfair rent increase, including just under 20% who have experienced this twice or more; 
• Just under 50% of renters say it is common to have problems with a landlord who refuses to fix problems in a rental property; 
• Almost one in three renters have experienced discrimination, with 32% of this cohort experiencing it four times or more.