Updated at 2.30pm

Simon Coveney says he has just got Cabinet approval for new rental plan pic.twitter.com/uIb7naIr3L — TheJournal Politics (@TJ_Politics) December 13, 2016 Source: TheJournal Politics /Twitter

AREAS WITH RISING rents in Dublin and Cork are to be targeted in the government’s new rental strategy, which has been launched this afternoon by Housing Minister Simon Coveney.

‘Rent pressure zones’, recognising regions where there is sustained tension in the rental market, will be identified by the Residential Tenancies Board (RTB) as part of the plan.

This afternoon’s statement from Coveney’s department said the pressure zones would be introduced with immediate effect in Dublin city and county and in Cork city.

What happens in pressure zones?

The measures will cap rent increases in the designated zones to 4% per year over a three year period.

According to the Department:

“These are areas where annual rent increases have been at 7% or more in four of the last six quarters and where the rent levels are already above the national average.”

The measures are being brought in straight away in the four council areas in Dublin, and in Cork city. From this afternoon’s announcement:

Rent pressure zones will be designated for a maximum 3 years, by which time new supply will have come on stream and pressures will have eased somewhat in these areas.

Despite calls from parties such as Sinn Féin and the Social Democrats, the new rental strategy does not contain a system of national rent control.

Speaking this afternoon, Coveney said he believed a national rent cap would have “devastating consequences in terms of supply” and that he didn’t think it would work.

The government was “putting a bridle on a horse that has been almost out of control for the last two years” in terms of rental increases, he insisted.

The Minister said he had spoken to his counterpart in Fianna Fáil, Barry Cowen, and hoped to get the plan passed by the end of the year.

The new plan will also strengthen of the role and powers of the Residential Tenancies Board – the agency set up in 2004 to resolve disputes between landlords and tenants.

The measures include boosted dispute resolution timeframes (time for appeals will be cut from 21 to ten days and one person tribunals will be held in some cases – allowing for more tribunals to take place). The law in the area would also be simplified, according to the plan announced this afternoon.

Today’s measures follow changes introduced last year by then-housing minister Alan Kelly, which included longer notice periods for any rent increases and a two-year limit on how often rents could be reviewed.

Since then, rents have continued to climb. Over the past 12 months, prices have gone up 8.6% nationally, according to the latest figures from the RTB.

Vulture funds

Taking questions from reporters on the issue of homes that have been brought by so-called vulture funds, he said that when ten or more houses are sold together, tenants should have tenancies uninterrupted.

A measure to allow for that change is included in legislation going through the Oireachtas at the moment, and the issue was also covered in today’s plan, Coveney said.

Residents of Cruise Park in Tyrrelstown in West Dublin had been holding a separate event near the Dáil this morning to highlight their cause.

Reduced incentives

Coveney’s plans, which were formally announced at a press conference at Government Buildings this afternoon, have already been criticised as likely to reduce supply in critical areas.

In a briefing note this morning, Goodbody analysts Colm Lauder and Eamonn Hughes said previous rent controls meant there hadn’t been price increases at many properties for a “significant period of time, while market rents have appreciated considerably”.

“As a result, large swathes of the residential lettings market would be technically under-rented, yet the landlord unable to ‘mark-to-market’,” they said.

We see this as damaging to professional landlords operating in the Irish market and will provide reduced incentives to growing lettable stock.

There was also criticism from property owners’ association the IPOA, which described the measures as an attempt to re-introduce rent control.

“Short term interference causes long term difficulties undermining the confidence of prospective investors,” Chairman of the group Stephen Faughnan said in a statement.

“The State has caused the rental crisis and continual interference is making it worse,” he added.

Sinn Féin’s Eoin O Broin, meanwhile, said the simple fact was that rents are too high and that the Minister was allowing landlords to continue to increase rents.

Renters simply don’t have the money. I see no benefit in what he’s announced today for renters.

Today’s announcement was the latest installment of the Rebuilding Ireland plan, launched back in July to tackle the spiralling housing and homelessness crisis.

Reporting by Daragh Brophy, Christina Finn and Peter Bodkin.

TheJournal.ie will be hosting a special Facebook Live interview with the Minister for Housing Simon Coveney in TheJournal.ie HQ in Dublin on Thursday evening.

We want YOUR questions for the minister on the new rental strategy.

Is your rent going through the roof? What questions or concerns do you have? What will impact you? Is there anything missing?

Send your questions to christinafinn@thejournal.ie.