Simon Coveney (Cork South Central, Fine Gael) | Oireachtas source

Market rent is defined in the Residential Tenancies Acts as the rent a willing tenant would give and a willing landlord would take for the dwelling concerned, having regard to the other terms of the tenancy and the letting values of dwellings of a similar size, type and character and situated in a comparable area. It is important to note that any notice of new rent given by a landlord to a tenant must be accompanied by three examples of comparable rents, all relating to dwellings advertised for rent in the month prior to the date of the notice. Having considered the definition of market rent during the development of the strategy, I believe this is a robust definition which is enforceable having regard to the RTB rent index, and I do not intend to amend the definition of market rent at this time.

My understanding from a note I have about Germany is that new rent control measures were part of the programme for Government in 2013 and came into effect in September 2014. The legislation sets out that rents for new leases in certain areas can only be set at a maximum of 10% above average local rents. This is aimed at keeping local average rental inflation relatively low. In comparison, in Ireland rents cannot be set above the market rent and in a rent pressure zone rents under new leases are governed by new rent control measures with maximum increases of 4%. I am not sure that switching to the German approach would make a significant difference. Under the mietspiegel, which means "rent mirror", approach, local authorities attempt to calculate, on the basis of average local rent, what certain areas are paying as a guidance figure. We are trying to achieve that as well by forcing landlords to get at least three rent advertisements for similar properties in the area, a process that is overseen by the RTB. I understand the point the Deputy is making and that we need to find a mechanism to slow down dramatic rental inflation and protect against landlords taking advantage of the fact that there is a significant supply shortage in certain areas. We are trying to do that with the introduction of the rent pressure zone measures before Christmas.

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