Landlords in Dublin and Cork will only be able to increase rents by up to 4 per cent a year, over the next three years, under new proposals being brought to Cabinet on Tuesday.

Rising rents have been blamed for the homelessness crisis and in a move to tackle the issue, Minister for Housing Simon Coveney is to announce a series of measures targeting the private rental sector.

The centrepiece of his plan will be to give tenants “rent predictability” in areas that have seen rents rise rapidly. It will focus on so-called rent pressure zones.

Under these plans, the Residential Tenancies Board (RTB) will assess rental rates and judge whether rents have increased at above-average market levels for 12 of the last 18 months.

If this is found to be the case, the RTB can recommend to the Minister that these areas be designated as rent pressure zones.

Annual rents in these areas will only be be allowed to increase by 4 per cent a year, or 12 per cent over three years.

Continue to apply

Existing measures introduced last year by then Labour Party minister for the environment Alan Kelly will continue to apply outside the designated rent pressure zones.

These measures only allowed for rent reviews to take place every two years.

Sources said Dublin and Cork will immediately be designated as rent pressure zones .

The RTB, formerly the Private Residential Tenancies Board, will be entitled to examine the rents prevailing in every local electoral area in the country. It operates a national tenancy registration system and resolves disputes between landlords and tenants.

It also provides policy advice to the Government on the private rented sector. It will be able to advise the Minister whether different areas should be designated as rent pressure zones.

Rent restrictions

Once the RTB designates an area, rent restrictions will apply for three years.

A landlord will be able to increase the rent every year within that timeframe, up to 4 per cent.

The RTB will also advise the Minister on whether to remove areas, or delist them as pressure zones, in the future, depending on market conditions.

New housing units put on the rental market will be excluded from the new proposals, as will vacant units that come back on the housing market following renovation. Both these moves are designed to increase the supply of housing units.

Mr Coveney on Monday night briefed the Cabinet subcommittee on Housing on his plan, and will seek the assent of the full Cabinet at its weekly meeting on Tuesday.

Mr Coveney’s overall strategy for the rental sector will focus on four main areas: security of tenure, maintaining and improving supply, improving the standard of private rental accommodation and the aforementioned rent predictability.

Rental inspections

Under moves to improve standards, it is hoped that up to 25 per cent of all private rented accommodation will be inspected annually once the strategy takes full effect.

At present, about 10 per cent of all private rented facilities are inspected and more resources will be directed towards councils to allow them carry out the inspections.

Housing charity Threshold will also on Tuesday publish its annual report for 2015 and will say that “skyrocketing” rents and insecure tenancies are the main causes of the homelessness crisis.

Threshold will also say that the number of people contacting the charity last year rose by 54 per cent on 2014 levels.

Aideen Hayden, Threshold chairwoman, says this is “indicative of the huge issues that are faced by those living in the private rented sector”.