Oireachtas passes legislation to cap rent increases at 2% per year

The Bill will see rent increases capped at either inflation or 2% per annum, whichever is lower.

It also provides for tenancies of unlimited duration and will know go President Michael D Higgins for signing.

The rent increase cap will apply immediately upon enactment.

The Bill was one of the reforms committed to under the Government’s Housing for All scheme, the plan “to create a sustainable housing system”.

Mr O’Brien stated: “When introducing the legislation to link any rent increases to inflation in July, I was very clear on the need to carefully monitor inflation.

“At that time, inflation averaged 0.73% per annum over the previous three years but had risen to 1.6% per annum in the year ending June 2021.

“Given the unexpectedly fast rise in the Harmonised Index of Consumer Prices, I quickly moved to engage with the Office of the Attorney General and secured Government approval to introduce a 2% cap on rent increases in RPZs.” 

He added that the Bill “respects the constitutionally protected property rights of landlords and aims to safeguard continued investment in the sector by existing and new landlords to deliver the requisite supply of high-quality rental accommodation.” 

A report from Daft.ie last month found that rents in Ireland are an average of 6.8% higher than a year ago.

The average rent in Ireland is now €1,516, more than double the low of €742 per month seen in late 2011.

Rents in Munster have jumped by 15.6% in the last year, with a home in Cork City now costing an average of €1,544 a month.

A lack of rental homes was blamed for the rising rental costs, with just 1,460 homes being available to rent across the country on November 1 this year.

Mr O’Brien said that the Housing for All plan aims to deliver “18,000 cost rental homes between now and 2030” which he describes as “an ambitious but achievable target”.