Increasing rents - Homeowners can offer digs

THE current boom in rents would seem to suggest that the economy is improving.

Rents rose by an average of 3.9% in the three months from April to June of this year, which was the biggest quarterly increase recorded since 2007.

A frightening aspect of the increases is that they are in cities like Dublin, Cork, Galway, Limerick and Waterford, which are centres for third-level colleges.

In Dublin, rents have risen by 51.3% since late 2010 and are now 5.2% above their peak rate before the economic crash in 2008.

The cost of renting a one bedroom apartment in Cork is up by 15.2% in the past year, up 12.9% in Limerick, 10.7% in Galway, and 10.3% in Waterford.

These are running hugely ahead of inflation, but prices are going up because of demand.

The downturn in construction and increased demand has led to a natural rise in rents.

Measures were introduced to control the rise in rents, but these only protect students for the nine-month period druing which the normally rent.

Obviously the issue of student accommodation needs to be tackled, but it is too late to begin construction at this stage.

This could afford homeowners an opportunity to let out an empty room in their house as digs.

Under current legislation they could do so without going through lengthy bureaucratic procedures, and they could avail of tax relief, which exempts the rental income on student digs on earnings that do not exceed €12,000 annually.