By James Ward, PA
Tánaiste Leo Varadkar has rejected calls for a three-year rent freeze, saying a “balance” must be struck between regulating costs and protecting income for landlords.
Earlier this year, the Government introduced measures to tie rent hikes to the rate of inflation, but the inflation rate has since reached a 13-year high of three per cent.
On Tuesday Sinn Féin, the Labour Party and the Social Democrats all called for a three-year ban on rent increases to combat the soaring costs.
But Mr Varadkar said freezing rent increases at zero would see some property-owners losing out on income and unable to pay their mortgages.
He told the Dáil: “The number of rental properties available in Ireland is falling, landlords are leaving the rental market.
“Bear in mind most landlords, I’m not one of them, only owns one property or two, 86 per cent own only one property or two. We need to balance that too.
“One person’s rent is another person’s income, it might be their pension, it might be how they pay the mortgage.
“In a time of rising prices, and in a time of rising interest rates… if you freeze rents absolutely to zero, that could mean an income cut for another person, or a pension cut for another person, or another person unable to pay the mortgage on that property.”
Bring down rents
He added: “The only solution to bring down rents, and the objective should be to bring down rents and not just to freeze them, is more supply and that’s what we need.”
Mr Varadkar was responding to a question from Sinn Féin housing spokesman Eoin Ó Broin, who accused the Government of forcing people into financial hardship by failing to intervene in the rental market.
He said: “In 2018, rents rose by four to 10 per cent. Again, in many many cases in areas where the cap is four per cent.
“And the same happened in 2019 and every year since then rents have continued to rise.
“In fact, thanks to Fine Gael and the last government, supported Fianna Fáil, the average renter today pays more than €4,000 more a year in rent than they would have done if you had accepted our legislation.”
Citing a report in the Irish Independent, Mr Ó Broin said the rate of inflation is on course to pass four per cent.
He said: “You’ve said you’ve introduced a rent freeze in real terms.
“In fact, when the legislation was introduced, inflation was at 1.9 per cent. It then rose to 2.2 per cent. It’s now at three per cent.
“Today, in the Irish Independent economists are quoted as saying it is likely to pass four per cent.
“So the question arises, if it goes past four per cent, will you accept the error of your ways and introduce emergency legislation to protect renters?
“A rent freeze means no rent increases, not two, three, four or five per cent.”