Written answers

Wednesday, 4 March 2015

Department of Environment, Community and Local Government

Private Rented Accommodation Costs and Controls

Photo of Paul MurphyPaul Murphy (Dublin South West, Socialist Party)
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38. To ask the Minister for Environment, Community and Local Government if he has concerns regarding the role of vulture funds in increasing rents by over 20%, as reported recently (details supplied); and his views on his position as regards their growing involvement in the residential sector, as result of buying up loan books sold off by the banks or the National Asset Management Agency. [9103/15]

Photo of Paudie CoffeyPaudie Coffey (Waterford, Fine Gael)
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The Residential Tenancies Act 2004 regulates the landlord-tenant relationship in the private rented sector and sets out the rights and obligations of landlords and tenants relating to,inter alia, security of tenure, termination of tenancies, rent and rent reviews. The 2004 Act provides that rents may not be greater than the open market rate and may only be reviewed upward or downward once a year unless there has been a substantial change in the nature of the accommodation that warrants a review. Tenants must be given 28 days’ notice of new rent and can make an application for dispute resolution to the Private Residential Tenancies Board (PRTB) where they feel the rent increase is in excess of the market rent. These provisions have effect notwithstanding any provision to the contrary in a lease or tenancy agreement. In terms of the current market, apartment rents in Dublin in the third quarter 2014 were 11.6% higher than the same period last year, according to the most recent rent index from the PRTB. The average rent for an apartment in Dublin is €1,170.

The main cause of rising rents is a lack of supply in the market. The implementation of the range of actions under the Government’s Construction 2020 Strategy will support increased housing supply. In addition, the recently published Social Housing Strategy 2020 sets out clear, measurable actions and targets to increase the supply of social housing, reform delivery arrangements and meet the housing needs of all households on the housing list. The total targeted provision of over 110,000 social housing units will address the needs of the 90,000 households on the housing waiting list in full, with flexibility to meet potential future demand.

As the Deputy will be aware, a significant consequence of the financial crisis in Ireland has been the deleveraging of our financial services system, which includes the individual bank asset sales programmes which are now largely complete, the liquidation of IBRC and the on-going disposal of NAMA's assets.

A key objective in each of these deleveraging processes has been to achieve the best possible financial return for the State.  With asset disposal processes occurring and set to continue in both Ireland and across Europe, Irish institutions have and will continue to face competition for investment capital as they seek to achieve the best possible financial return.

Ireland is a small open economy and as such we do not discriminate between domestic and international investment capital.  The vast majority of Irish assets sold in the wake of the financial crisis have been openly marketed for sale to ensure that the best price available in the market is achieved. This approach allows both Irish and non-Irish buyers to compete for all assets. It would not be in the interest of the State to favour any class of buyer or impose restrictions or curtailments on these transactions.

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