Rents rise in Mayo ahead of rent controls

Ciara Moynihan

Mayo rents were on average 4.7 percent higher in the third quarter of 2015 than a year previously, according to the latest quarterly Rental Report by Daft.ie. The rent inflation comes ahead of the Government’s introduction of its ‘New Deal for Tenants’ – measures designed to control soaring rents.
The annual rise in rents now stands at 9.3 percent nationwide, with the increase being driven by trends outside the capital for the second quarter in a row. During the July to September period, rents rose nationally by an average of 3.2 percent – the largest three-month increase since early 2007.
Connacht generally saw rents rise 6.6 percent in the year to September 2015, compared to an increase of 1.2 percent a year previously. The average advertised rent in Mayo during the July to September period was €560, up 8 percent from the lowest point in 2013.
While the rise in Mayo is substantially higher, percentage wise, than the country’s overall average in the same period, average rents in the county still remain a good deal lower than the national average of €964.
Under the New Deal for Tenants, landlords will only be allowed to increase residential rents every two years. In a bid to stop rent hikes ahead of the introduction of the legislation, Minister for the Environment Alan Kelly said it ‘would be illegal’ for landlords to do so unless a rent review is due or, if under the terms of the tenancy, the rent has not been increased in the last year or two and a rent review is due.
He has also urged tenants who are worried about such actions to contact Private Residential Tenancies Board (PRTB), and to see if the rent can be frozen while the issue is dealt with.
Meanwhile, landlords have reacted negatively to the rent control measures, with the Irish Property Owners’ Association branding them ‘unjust’.
Commenting on the impact of the Government’s rent-review measures, Ronan Lyons, economist at TCD and author of the Daft Report, said: “The latest Rental Report suggests that the market reacted to talk of rental controls … Ultimately, while controls on rent increases may help those at risk of becoming homeless, they do nothing to help those already homeless. The much more pressing issue that needs to be addressed is the lack of supply, which ultimately depends on the cost of construction.”
Ironically, it was reported yesterday (Monday) that the IMF believes the coalition’s decision to impose rent controls could ultimately slow down construction in the residential property sector. The body is concerned that the measures could ‘dissuade construction’ by ‘reducing rates of return on investment properties’.