Rent Freeze: “Balance” Needed Between Regulations & Landlord Income

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Calls for a three-year rent freeze were rejected by the Tánaiste as a “balance” is needed between regulating costs and protecting income for landlords. Measures were made earlier this year to tie rent hikes to the rate of inflation, but a 13-year high of 3% puts such measures under pressure.

Sinn Fein, the Labour Party, and the Social Democrats put forward calls for the three-year ban on rent increases to prevent inflating costs. However, Tánaiste Varadkar highlighted that some property-owners losing out on income and unable to pay their mortgages due to freezing rent increases.

Varadkar told the Dáil: “The number of rental properties available in Ireland is falling, landlords are leaving the rental market. Bear in mind most landlords, I’m not one of them, only owns one property or two, 86% own only one property or two. We need to balance that too. One person’s rent is another person’s income, it might be their pension, it might be how they pay the mortgage.

The Tánaiste believes freezing rent in a time of rising prices, and in a time of rising interest rates could put some people’s income, pension, or mortgage payments. Mr Varadkar suggests that the only solution is to bring down rents, not freeze them. Sinn Fein housing spokesman, Eoin Ó Broin accused the Government of failing to intervene in the rental market, forcing people into financial hardship, prompting Varadkar’s response:

The objective should be to bring down rents and not just to freeze them, is more supply and that’s what we need. In 2018, rents rose by four to 10%. Again, in many, many cases in areas where the cap is 4%. And the same happened in 2019 and every year since then rents have continued to rise. In fact, thanks to Fine Gael and the last government, supported Fianna Fail, the average renter today pays more than 4000 euros more a year in rent than they would have done if you had accepted our legislation.”

Sinn Fein housing spokesperson Eoin Ó Broin questioned the Tánaiste’s figures on “real terms” when “in fact”, inflation was at 1.9% when legislation was introduced.

It then rose to 2.2%. It’s now at 3%. Today, in the Irish Independent economists are quoted as saying it is likely to pass 4%. So, the question arises, if it goes past 4%, will you accept the error of your ways and introduce emergency legislation to protect renters? A rent freeze means no rent increases, not 2, 3, 4 or 5%.”