The International Monetary Fund (IMF) believes the Government should scrap rent caps to increase the number of properties in the rental market.
Rent Pressure Zones – areas where rents are highest and rising quickest – were introduced in 2016 with an annual cap of a 4% increase in rents in those areas. However, this was reduced to the current rate of 2% in 2021.
In its annual assessment of the Irish economy, the IMF said the complexity and restrictiveness of rent legislation needs to be tackled.
Landlords exiting the market accounted for more than 60% of tenants being evicted from their homes in the last quarte (Pic: Getty Images)
It said: ‘Replacing rent caps with more targeted housing support for poor households would help increase rental housing supply.’
Landlords exiting the market accounted for more than 60% of tenants being evicted from their homes in the last quarter. The Irish Property Owners Association (IPOA) said that the ‘lack of meaningful support’, apart from tax breaks, for landlords in last month’s budget will mean the trend of selling up and exiting the market will continue.
The IMF said there was a need for an increase in housing density and measures to improve productivity in the construction sector to ‘sustainably boost housing supply’ and support growth.
The price of renting in Dublin as a whole remains a serious issue, but for students it is becoming all the more pressing, as was apparent with the rate at which the University College Cork food bank handed out packages to students in need. Pic: Getty Images
It also said there is a need to provide ‘greater certainty to developers’ by improving the planning process.
‘Increased housing supply would help relieve labour shortages and facilitate labour mobility, hence supporting long-term growth,’ it said.
The IMF’s assessment