Rent prices, something that seems to always be steadily increasing. In 2016, the Irish government began to take note of a fast moving, upward trend in certain zones and put a price ceiling on rent prices in an effort to regulate these changes. Areas that have a high likelihood to increase rent, specifically because of location and competition, are called Rent Pressure Zones (RPZ).
These zones are primarily located in the larger cities, such as Dublin, Galway or Cork and have specifications that help to protect renters from exorbitant hikes in monthly prices. Any property within a Rent Pressure Zone are legally not allowed to increase their prices by more than 4pc each year.
This ceiling in rent increases are intended to create a more affordable market for landlords and tenants so that they can have a good idea of how prices could rise; this is ideal for planning housing opportunities and finances in the future. This program worked for the most part, with many tenants seeing an increase of between 2.4 and 3pc a year from 2016 to 2018.
Although this has significantly slowed down the renting price rise, there is still a significant amount of people who experience an increase of 4pc or more each year. There are many possible exemptions that would get landlords around this rent ceiling. These exemptions apply to properties that have not been rented out in the last two years or have gone through substantial changes in the nature of the property.
By doing minor accommodation renovations, many of the property owner can increase their rents beyond 4pc legally. This is why two in five of current tenants in the Rent Pressure Zones continue to have an average increase of over the ceiling amount.
Another issue with this program is that the agreements of many of the landlords and tenants are not in compliance with the RPZ requirements. This has to do with the terms agreed to in a rental agreement that had occurred before the passing of the RPZ criteria or just general non-compliance from the current owners.
Overall, these rent pressure zones are having an impact on many of the rental properties but it also provides many exemptions that are easy for landlords can use as loopholes. There is also a clear level of non-compliance from landlords, which shows that they continue to dominate the market and their prices despite government intervention.