Terence Flanagan (Dublin North East, Independent)
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I thank the Ceann Comhairle for the opportunity to raise this topical issue of the need for a cap on rental rates in Dublin. We know that rental prices in Dublin have gone through the roof - they have increased by 35% since 2011 and they are nearly back to their peak levels. The average rent for a three-bedroom house in Dublin is €1,400 per month and in some areas up to €2,000 per month, which is quite a lot of money.

A recent NABCO report found that one in three tenants in Dublin are now worried about the risk of losing their home. Obviously with no limit in place, tenants are very worried about their rights. Landlords are very much in charge and can increase prices almost overnight. More people are obviously being forced to rent because of the new Central Bank rules which put many people out of the market to purchase a property and into the rental property market. For anybody on an average income it is becoming extremely expensive with a very large proportion of a person's income being spent on rent, with wages not having increased in recent years and all the deductions through extra taxes, increases in transport prices as well as rental price increases.

Tenants have been forced out to commuter counties as a result of the high prices in Dublin, which, in turn, is forcing up prices in commuter counties by up to 14.5%. Obviously these unaffordable prices are forcing some families into homelessness. In January, 2,980 adults found themselves homeless at very significant expense to the taxpayer. Last year, Dublin City Council spent €4.5 million to house people in hotel accommodation. It is a matter the Minister needs to address urgently. I ask the Minister of State if she can give some hope to people who find themselves having to rent at the moment that extra supply will come online.

Eamonn Maloney (Dublin South West, Labour)
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As the previous Deputy has done, I wish to highlight the issue of the accelerating rents being charged in the private rental sector. We cannot ignore the trends in that sector. I firmly believe the only solution is to have a temporary rent freeze, ideally for a period of two years.

Any Deputy who might have said 12 months ago that it was attractive to invest in the private rented sector would have been laughed out of the place. However, the most recent figures indicate a very different picture. It is not only in the capital; it is widespread. The largest purchasing group in the residential market during the past 12 months have been investors. It is alarming that almost one out of every three properties sold in the past 12 months has been to an investor. For various reasons, it is a good period to be an investor in the market.

It is not a very good period for a family living in private rented accommodation. My experience is the same as that of the previous Deputy. No longer is it a case of individuals being made homeless - families are now being made homeless and we cannot allow it. We need some control, which is why I believe there should be a two-year rent freeze.

Ann Phelan (Carlow-Kilkenny, Labour)
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I thank the Deputies for raising this very serious and important issue. The private rental sector is regulated by the Residential Tenancies Act which sets out the rights and obligations of landlords and tenants, including relating to rent, security of tenure and the termination of tenancies. The Act was passed in 2004 and represented the most significant legislative reform in the private rented sector in over a century. Prior to this, there was little or no security of tenure for tenants and in most tenancies, the landlord had a virtually absolute right to raise the rent at any time.

Security of tenure under the 2004 Act is based on rolling four-year tenancy cycles. Where a tenant has been in occupation of a dwelling for a continuous period of six months and no notice of termination has been served in respect of that tenancy before the expiry of the period of six months, the tenancy is established for the remainder of the four-year period. Landlords and tenants may not contract out of this provision of the Act.

A report by DKM Economic Consultants commissioned by the Private Residential Tenancies Board, PRTB, which was published last autumn, considered a number of options relating to rent control, including a rent cap. A review of the literature for the report found that where rent caps are introduced, the fall in rents leads to a reduction in the supply of rental units. Supply is further impacted by a consequent reduction in housing mobility. As the main reason behind increasing rents is a shortfall in housing supply, we need to exercise caution in respect of measures which, prima facie, would seem to offer a solution. This is especially the case where the sector is volatile. In a recent RED C poll carried out for the PRTB, 29% of landlords stated that they intended to sell their property as soon as possible. In addition, according to Central Bank data, 38,000 buy-to-let mortgages are in arrears, accounting for 27% of all buy-to-let properties.

Almost one in five households is now housed in the private rented sector compared with one in ten in 2006. The rental sector cannot be divorced from the wider housing market and the virtual collapse of the construction sector after the economic crisis has led to a serious supply problem, particularly in Dublin and other cities. With the growth of household formation and the recovery in the economy, the lack of supply has seen market rents stabilising and rising since 2012. In the third quarter of 2014, rents were 5.6% higher nationally than in the same quarter of 2013, according to the most recent rent index from the PRTB. Rents for houses were 4.3% higher while apartment rents were 7.3% higher than in the same quarter of 2013. In Dublin, which is seeing the highest rates of increase nationally, overall rents were higher by 9.5%, although the rate of annual increase was down slightly. This moderating of rental inflation is reflected in the latest Daft.ierent report. Fundamentally though, the issue remains one of supply and the key to stabilising rents is to restore equilibrium in the housing market by addressing supply.

Terence Flanagan (Dublin North East, Independent)
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I thank the Minister of State for her response. As she stated, it is very much an issue of supply so could she provide details regarding the level of supply that will come on stream in 2015 and the coming years to provide hope and a home for people who badly need one? We know from the most recent report from Daft.iethat only 5,200 properties were available nationwide on 1 February 2015, which is the lowest figure available since May 2007. This is a major issue.

The introduction of new rules by the Central Bank will force people into the private rental market. Lots of constituents come to our clinics raising these issues. They are very worried and traumatised and they need some hope. I agree with Deputy Maloney that we need to look at introducing some element of a rent freeze because what has happened in recent times is very unfair, particularly to tenants who have been there on a long-term basis. In Germany, the law allows the state government to cap rent increases at no more than 15% over three years. Perhaps we could look to Germany or other countries which have a rent cap.

Eamonn Maloney (Dublin South West, Labour)
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I thank the Minister of State for her reply. Like her, I read the RED C poll. I am not sure about the validity or the truth or otherwise of those who were surveyed who said that they would very quickly give up their private investment in the rental sector. Why would they give it up? They say in a poll that they would but as we now know, rents were at their highest in 2007 when the artificial boom was in full flow. It is extraordinary that rents today are only 6% below what they were in 2007. Some landlords are exploiting the fact that the demand for rental property is outstripping supply by continuing to increase the rents until they reach the same level as those in 2007, the year when Irish rents peaked.

I return to a point I made previously. The Minister of State, her Department, the Government and us as Government supporters can take credit for dealing with homelessness and the programme for social housing, but we need take action on the private rental sector which is out of control. There is no control over it. Other European countries have controls but we have none. The problem is biggest in the capital and if we do not do something about it, it will become a landlord's paradise.

Ann Phelan (Carlow-Kilkenny, Labour)
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I thank the Deputies for raising this very important issue. I take on board the issue of rent and instability in the rental market. I would have spoken at great length about the need for stability in the rental market citing France, Germany and Italy, which has a very stable rental market, as examples. We should look at carrying out some research on this because we need to address this situation very urgently. It is amazing that after the boom, we are back in this situation again. I know Deputy Nolan raised the same issue in the House not too long ago and called it a perfect storm.

The Minister has introduced lots of strategies, including his homelessness strategy, and is making very good inroads into dealing with the housing crisis. I will certainly make it my business to take this issue up with him, have further discussions and revert to the Deputies.