Landlords restricted to 2pc increases a year but new rents continue to hit double digits
The so-called RPZs restrict rent increases to 2pc a year.
The current restrictions were due to run out at the end of the year.
The Government will today decide to extend the zones into 2025.
Since December 2021, annual rent increases in RPZs are capped in line with the rate of general inflation or 2pc a year, whichever is lower.
The RPZs are set in areas where rents are highest and rising quickly.
An area must meet certain criteria to become an RPZ. In these areas, annual rent increases are capped. RPZs were first introduced at the end of 2016 and were due to finish up at the end of this year.
If a landlord reviews the rent every year and the rate of inflation is 1.5pc, then the rent can only be increased by a maximum of 1.5pc. However, when the rate of inflation is higher than 2pc, the rent can only be increased by a maximum of 2pc.
But there is growing evidence that landlords are breaching the 2pc cap on rent increases in RPZs.
A report by the Rent Tenancies Board showing that new rents have increased by 11pc in the last year — whereas landlords in Rent Pressure Zones may only increase rents on renewal for sitting tenants by 2pc, below the rate on inflation.
Existing rents have increased by more than 5pc in 19 counties, while in Dublin it was over 4pc, twice the RPZ limit.
“This sharp increase provides growing evidence that landlords are breaching the 2pc cap on rent increases.”
Finance Minister Michael McGrath said the Rent Tenancies Board report was not a barometer of rent increases in RPZs. He said it specifically looked at all rents in order to get an overall picture.
Sinn Féin finance spokesman Pearse Doherty asked if the “penny has dropped” with the Government.
Mr Doherty said the renewal increases in areas outside RPZs were in double digits across the country. He called for a three-year freeze on rent increases.
But Labour Party leader Ivana Bacik weighed in on Mr Doherty’s side.
She said the granular detail of the report indicated that renewal increases in the geographic areas of RPZs were paying an increase 5.2pc — more than double the legal ceiling.
She said there is a flagrant breach and rents should not increase by more than 2pc in RPZs. Ireland was an outlier in the lack of protection we give to renters, she said.
Mr McGrath said however that it was the devolved responsibility of the Residential Tenancies Board itself to police the RPZ restrictions on landlords.
He said the RTB has the statutory powers that they need in relation to the enforcement of RPZ rules and they are active in ensuring compliance.
The RTB website shows 160 enforcement actions in recent years, with 80pc relating to the breaches of RPZ caps.