Damien English (Meath West, Fine Gael) | Oireachtas source

I am okay with Deputies who believe that but it is not possible to do that overnight. We are trying to ramp up building and we will get back to where we should be. As I said, local authorities should never have stopped building houses. We need to build houses but it takes a little time. We also need investment from the private sector because we need 25,000 or 30,000 houses to come on stream over the next couple of years and the State simply cannot do all of that. Some of those in opposition want the State to do everything in every sector, which is not possible. We genuinely believe we need a balance of social and private housing.

Many landlords would be forced out of the market and the confidence of new investors in long-term returns on investment would be fatally undermined. It would also be naive to think that landlords would accept such a radical interference with their ability to derive an income from their property. If these measures were adopted, it is inevitable that they would become the subject of legal challenge.When we developed the rental strategy before Christmas, we were very careful to present a balanced document and range of measures that would pass a legal test and ensure we would not be tied up in the courts but would instead achieve some results. I acknowledge some Deputies want to go further but we must try to balance things in terms of what we believe is achievable and would pass through the court system.

There are acute pressures in the rental market. These pressures are driven by a number of factors, including rising demand as a result of the economic recovery, a lack of supply and the high costs highly indebted landlords face in servicing their loans. I accept quite a lot of, rather than all, landlords are affected. This has led to significant rental price inflation over recent years. However, the long-term solution for the high levels of rent lie in increasing supply.

The rental strategy contains a number of specific measures to encourage and accelerate new supply, to keep existing rental units in the market and to bring vacant units back into use. The rent control proposed in the Bill would undermine all of our efforts to get supply going.

The Government's rent predictability measure is carefully designed to control rent increases without having negative effects on the supply of rental accommodation. It is effective in controlling rent inflation. It limits rent increases to a maximum of 4% per annum, which is less than one third of the rate of rent inflation reported by www.daft.ie. Tenants can expect to see significantly smaller rent rises than those they have seen recently or would have faced if the measure had not been introduced. The measure will have a substantial impact. The practical effect of the measure is that rents for more than 186,000 households who currently rent their homes in the areas concerned will be lower than they would have been if the market rents had continued to apply. Recent estimates from my Department indicate that households are likely to see savings of between €1,000 and €2,000 per annum, depending on the property type and location.For example, a family in a two-bedroom apartment in Dublin 3 would pay €1,056 less over one year compared with what they would have paid without the measure. We estimate that for a two-bedroom apartment in Ballincollig, the saving in a year would be over €1,600 while for a three-bedroom semi-detached house in Beaumont, Dublin, the saving would be almost €2,000. The figure of 4% is a carefully measured response to the current extreme pressures in the rental market. It will provide certainty for tenants that they will not face a rental hike of the order that may have been recently seen and provides certainty for landlords that they will continue see a return on their investments in rent pressure zones.

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