Rent Pressure Zones have decreased supply and created a culture of tenants subletting at higher prices, landlords are claiming.

RPZs first came into effect in December 2016 to prevent rent from rising too high in more expensive areas.

Within the zones, rent increases are capped at 2% or at the current rate of inflation – whichever is lower.

The Irish Property Owners’ Association (IPOA) has today renewed calls to scrap Rent Pressure Zones (RPZs), which will remain in place until at least December 2025. 

IPOA member Maurice Deverell argued the RPZs have forced landlords to keep rents below market value – while allowing tenants to sublet discreetly for higher prices and bank the profit. 

“[Tenants] are far better off to give [their lease] to someone they know at a higher rate and continue to pay the landlord the existing RTB rate,” he told Newstalk Breakfast. 

He said tenants are subletting to others “all the time” - and the landlords “generally would not know” it’s happening. 

“[During inspections], the tenant will have it set up like everything is normal,” he said. 

Banning Rent Pressure Zones

Mr Deverell claimed the issues with Ireland’s housing supply can be traced back to 2013 when the Green Party-led ban on bedsits came into force.

The ban prevented landlords from renting out properties without proper sanitary facilities and fire safety standards.

Mr Deverell, however, claimed it began a housing supply issue, which was then exacerbated by the introduction of RPZs in December 2016.

“It's like if you took out Lidl and Aldi from Ireland and said you could only do your shop in Brown Thomas,” he said.

“You were limited in supply and the options you had – you were renting a superior property, but you were paying for it.” 

Housing supply

Mr Deverell said a lot of landlords left the market following the introduction of rent caps in certain areas and there is still a lack of availability.  

He also argued landlords must keep rent low in RPZs - while tenants sublet the properties to others at whatever price they want.

According to the latest Daft.ie for the first quarter of 2024, rents went up by 0.6% - meaning they have increased by 4.9% in the space of the year. 

The report also found there were just over 1,200 rentals available in Dublin - a 4% increase year-on-year since 2022 - and 2,000 outside Dublin, a marginal decline.