Rent Predictability Measures were new provisions enacted under the Planning and Development (Housing) and Residential Tenancies Act 2016 (the “2016 Act”) that are intended to moderate the rise in rents in the parts of the country where rents are highest and rising and where households have greatest difficulties in finding accommodation they can afford.
In these areas, called Rent Pressure Zones (“RPZ”), rents will only be able to rise according to a prescribed formula by a maximum of 4% annually. The existing requirement that the rent set for a property must be in line with local market rents for similar properties and three examples of rents for comparable properties must be presented to demonstrate this, still applies.
The measure was applied immediately to Dublin and Cork city. It covers the 4 Dublin local authorities (Dublin City Council, South Dublin County Council, Dun Laoghaire/Rathdown County Council and Fingal County Council) and Cork City Council.
Minister Simon Coveney has announced the extension of Rent Pressure Zones beyond those introduced for Dublin and Cork cities in the following Local Electoral Areas (LEA’s) as Rent Pressure Zones with effect from today, Friday, 27 January 2017:
- Ballincollig-Carrigaline, Co Cork
- Galway City Central
- Galway City East
- Galway City West
- Celbridge-Leixlip, Co Kildare
- Naas, Co Kildare
- Ashbourne Co Meath
- Laytown-Bettystown, Co Meath
- Ratoath, Co Meath
- Bray , Co Wicklow
- Wicklow, Co Wicklow
There are 26 towns included in these Local Electoral Areas including, Sallins, Rathagan, Slane, Julianstown, Duleek, Dunboyne, Dunshaughlin, Enniskerry, Douglas and Passage West.
If your home or property falls within one of these areas it is covered by the measure.
What makes an area a designated Rent Pressure Zones?
For an area to be designated a Rent Pressure Zone, rents in the area must be at a high level and they must be rising quickly, the criteria are:
- The annual rate of rent inflation in the area must have been 7% or more in four of the last six quarters,
- The average rent for tenancies registered with the Residential Tenancies Board in the previous quarter must be above the average national rent in the quarter( the National Indicative Rent in the RTB’s Rent Index Report)
Who decides what areas are Rent Pressure Zones?
Rents are closely monitored and the Housing Agency, following consultation with the Local Authority concerned, may propose an area to the Minister for consideration. The Minister will ask the Residential Tenancies Board, which collects and monitors the data on rents, to assess whether the criteria apply to the area. If they do, the RTB will confirm that to the Minister and the Minister will make the relevant order. The RTB will then publish the designation.
Are all rental properties covered?
Not all rental properties are covered by the 4% annual rental restriction. Properties that are new to the rental market and have not been let at any time in the previous two years and properties which have undergone a substantial change can be exempted from the measure.
A ‘substantial change’ must be a significant change to the dwelling resulting in increased market value of the tenancy. This would involve significant alterations or improvements which add to the letting value of the property.
If I want to raise the rent on my dwelling in a Rent Pressure Zone, what do I need to do
Where a landlord is setting the rent in a Rent Pressure Zone the amount can not be greater than the amount determined by the below formula, the existing requirement that the rent set is not above the local market rents for similar properties still applies and three examples of rents for similar properties in the locality must be presented to demonstrate this.