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Rents for newly-built properties will no longer be capped at 2% annually but will instead be tied to the rate of inflation under plans set to be considered by Cabinet next week.

Changes to the Rent Pressure Zones will be brought to Government by Minister for Housing James Browne on Tuesday.

The move is aimed at giving investors certainty given they currently can make a loss when inflation goes above the 2% mark.

Other measures to close the “yield” gap and around “viability” will be taken by the Government in the coming weeks and months.

For existing renters, nothing changes if they stay in their current tenancy.

However if they move, a landlord can reset the rent for the new tenant at the market rate.

Any rent increases after that would be capped at the existing 2% rate.

There will also be protections for new renters under new legislation which will be drawn up soon.

This will provide security of tenure for a minimum of six years.

This is being hailed as a significant development within Government, and it is viewed as the ending of no-fault evictions for the first time in this State.

The landlord can reset the rent at each six-year interval to the market rent.

Annually the rent will be subject to a 2% RPZ increase.

Taoiseach Micheál Martin has said the Housing Commission had advocated for a reform of the system.

He said that proposals are well balanced and that this is one strand in multiple strands to get the scale of house and apartment building the county requires.

Mr Martin said the measures would give greater protections to renters and provide certainty for investors.

He added that the package will give certainty and stablity to allow people to invest in the housing market.

Minister of State for Migration Colm Brophy said he believes people will see the Government’s housing plan before the Dáil breaks for the summer in July.

Speaking on RTÉ’s The Week in Politics, he said it should be revealed “very shortly” and there has been a “substantial amount of work” done.

“Government wants to see this rolled out so that we can reach our targets. Government will roll it out very, very soon,” he said.

The minister said “ultimate protection” for renters is to deal with the housing supply issue and get more homes built.

People Before Profit-Solidarity TD Paul Murphy said rents have doubled in Ireland over the past ten years and are “completely unaffordable”.

He called for public investment and a State construction company.

“For every home that’s build by private corporations in this country, they’re taking about €70,000 out in profit. The State needs to do this directly,” he said.

Mr Murphy said the plans will make things even worse for renters and are actively encouraging more increases in rents.

“This is what they’ve already been doing, they’re effectively doubling down on a failed strategy and the only people it will work for is the corporate landlords and private developers who are currently already making a killing and want to make even more.”

Sinn Féin TD Louise O’Reilly accused the Government of not being serious about protecting renters and ensuring that people can afford to have somewhere to live.

“They are very serious about incentivising developers and big business but that is not going to help people who are stuck in their parents’ back bedroom,” she said.

Ms O’Reilly said people are being forced into homeless as they cannot afford to rent in the private sector.

“Evictions are going up. The only protection that renters had was an eviction ban, the Government lifted that.

“They promised protections for renters that didn’t happen.

“The only other scheme that in any way prevents homelessness is the tenant in situ scheme and they have effectively closed that by cutting the funding to it.”

Article Source – Rents for new builds to be tied to inflation under plans set to go to Cabinet – RTE

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