The Daily Star Ireland
Rents on newly-constructed residential properties in Ireland could soon be tied to inflation rates rather than being restricted to a 2% annual cap. This potential policy shift, to be considered by Cabinet next week, is part of a broader plan from Minister for Housing James Browne aimed at addressing financial challenges facing property investors and ensuring greater clarity in the rental market.
The proposed adjustment would apply to newly-built homes within designated Rent Pressure Zones (RPZs), which currently limit annual rent increases to 2%. Under the new proposal, rent increases for these properties would instead follow the Consumer Price Index, which reflects inflation trends.
This change is seen as an effort to improve viability for developers and investors who may be incurring losses when inflation outpaces the rent cap. Additional reforms addressing profitability and sustainability of investments are expected to follow in the coming weeks.
The reforms will not affect tenants who remain in their current rental agreements. However, if a tenant vacates, landlords would be allowed to reset the rent to reflect the prevailing market rate for a new lease. Any rent increases thereafter would again be limited to the existing RPZ cap of 2% per year.
New tenancy agreements will also fall under enhanced legislative protections. A key proposal includes securing tenure for a minimum of six years, a move that would mark the end of no-fault evictions. Under this framework, rent can be reset to market level at the start of each new six-year cycle, but annual increases within that term will be capped at 2%.
Reactions from Government and Opposition
Minister of State for Migration Colm Brophy suggested the Government’s broader housing strategy would be unveiled before the parliamentary recess in July. Speaking publicly, he emphasized that extensive preparation had been undertaken and that the rollout was imminent. Brophy reiterated that increasing housing supply remains the ultimate solution to protecting renters.
However, opposition lawmakers sharply criticized the direction of the proposed reforms. Paul Murphy, TD for People Before Profit-Solidarity, condemned the Government’s approach as favoring private developers and corporate landlords at the expense of tenants. He argued that rents had doubled over the past decade and now reached unaffordable levels for many households.
Murphy called for a significant shift toward public-sector homebuilding, advocating for a state-run construction company. According to him, private sector developers extract high profits—estimated at €70,000 per home—and the state could more effectively deliver affordable housing by building directly.
Sinn Féin TD Louise O’Reilly also expressed concern that the reforms fail to offer meaningful protection to renters. She argued that the Government’s priority lies in incentivizing large developers rather than addressing the immediate needs of those struggling to secure affordable accommodation. O’Reilly noted that rising eviction rates and the recent lifting of an eviction ban have worsened the housing crisis.
She also criticized the scaling back of the tenant-in-situ scheme, which had offered a mechanism for local authorities to purchase rental homes on behalf of tenants at risk of eviction. The reduction in funding, she said, had effectively ended the scheme, removing a crucial safety net against homelessness.
