Sitting tenants’ rents rise three times more than rules allow

The state body that regulates the rental sector is to probe why this is happening, but it will be the end of the year before it completes its investigation.

The suspicion is that landlords are breaching the rules that limit rent ­rises to no more than 2pc a year.

Rents for existing tenants rose by 6pc in the last four months of last year, according to the latest index from the Residential Tenancies Board (RTB).

Rents for new tenancies shot up by 9.1pc in the last year, despite the fact most of the country is covered by State-mandated rental pressure zones (RPZs). This is one of the highest percentage increases in rental costs in the last few years.

Under the law, rents in RPZs are not supposed to rise more than 2pc a year.

New data commissioned by the RTB shows the cost of new tenancies rising by multiples of the levels permitted under the law.

Nationally, the average rent in the last three months of last year was €1,374 a month for a sitting tenant, a rise of 5.9pc on the same quarter last year. This works out at €77 a month more than the same quarter in the previous year.

The annual cost of renting for a sitting tenant has gone up by €924.

However, new tenancy agreements are even more expensive. Across the State, the average new rental agreement is costing €1,595 a month.

This is €133 a month more expensive than a year ago. It means the annual cost of taking on a new rental property is up €1,596.

The gap between the cost of new and existing tenancies is now 16pc.

Lucia Crimin, deputy director of the RTB, insisted the board’s rental index did not measure compliance with the RPZ legislation.

“The 5.9pc annual increase in rents in existing tenancies is not to be interpreted as a measure of compliance with the RPZ rules,” the board said.

Ms Crimin said in a statement: “We have recently commenced analysis on the registration dataset to understand how rent amounts change over time in individual properties both inside and outside rent pressure zones.

“We expect that by the end of this year, through this process, we will enhance our ability to identify potential non-compliance with rental law – in particular the requirements to register tenancies and to set rent in compliance with RPZ rules.”

Ms Crimin said the board was using the rent index data to build a process to identify non-compliance with rental laws.

The average rent for new tenancies in Dublin in the last three months of last year was €2,098. This is €293 a month higher than the cost for existing tenancies which stood at €1,805.

The standardised average rent for new tenancies in Cork in the fourth quarter of last year was €1,400. This is €242, or 21pc, higher than the average rent for existing tenancies, which stood at €1,158.

Commenting on the latest figures, executive director at the Simon Communities of Ireland, Wayne Stanley said: “The figures released today by the Residential Tenancies Board (RTB) makes for grim reading for the people who have just been served a notice to quit. They will now be required to find an additional €221 a month.

“For those on the lowest income, many rely on HAP payments to sustain their households and an additional €221 can be insurmountable. They may also be topping up already.

“The report also shows a 21pc fall in registrations in 2023, signalling the continued tightening of rental housing supply, making it even more difficult to find a home.

“Unless we see Government action on HAP rates and the implementation of homeless prevention measures, such as those in the Simon Homeless Prevention Bill, all of these factors combined will see homelessness increase.”

Sinn Féin housing spokesman Eoin Ó Broin said the private rental sector was spiralling out of control. He noted there was also a significant drop-off in new tenancy registrations, down 31pc on the same period the previous year.

“For renters, this means rents continuing to spiral out of control while supply continues to contract,” he said.

“Average new rents in Dublin are now €25,000 a year and existing rents [are] €21,600 a year in the capital.

“Outside Dublin, new rents now cost on average €19,000 and existing rents €16,488.”

Speakign on RTÉ Radio One’s Morning Ireland on Thursday morning, Mr Ó Broin criticised Government measures for failing to adequately address the crisis, including a “paltry” rent tax credit and setting “too low” targets for social and affordable homes.

“There is absolutely no point giving a renter a tax credit that is just absorbed and more in rent increases,” he said.

“What they are doing is not working for renters. It has never been harder to be a renter. It’s more insecure, more expensive.”

He said the situation is “going to get worse” without changes in housing policy and said the government is accepting the need for 50,000 new homes a year “very, very late in the day”.

He also said a better stream of emergency temporary accommodation is required to deal with the large numbers of international protection applicants who are currently without housing.