The new system of rent caps, limiting annual rent increases to 4%, will be extended to Galway City and 23 smaller towns from midnight tonight.

The towns are mainly in the commuter belt surrounding Dublin and on the outskirts of Cork city.

Housing Minister Simon Coveney signed the orders this afternoon on foot of recommendations from the Residential Tenancies Board (RTB).

Speaking on Newstalk Drive this evening, the minister said he had asked the RTB to assess a list of areas submitted to him by the Housing Agency for possible designation:

“I got a report this week from the Housing agency and they came back with a recommendation that I should look more closely at areas in County Cork, in Galway city, in Kildare and we have done that,” he said

“Around 25 towns or so will now come in to the rent pressure zone designation.

“I will make the designations this evening because we don’t want to leave any gap between when we talk about towns and when we actually designate them.”

The new zones include nine in County Meath, seven in County Kildare, three in Wicklow and four in Cork.

Galway city will also join Dublin and Cork city as a so-called 'rent pressure zone'.

However, the minister has opted not to include a number of major urban areas including Waterford city, Portlaoise, Navan and Maynooth.

Minister Coveney said his department has been working with the Residential Tenancies Board (RTB) to ensure enough refined data was available to target areas of the country where severe rent pressures were being experienced.

“We have made very significant progress in a short space of time to have this new system in place and to ensure that we can properly target this intervention towards those areas facing the most severe pressures.

“Over the medium term though, additional supply is the right way to address rental pressures.

“We need now to ensure that the supply side response is strong and swift by implementing the full range of complementary supply measures contained in the rental strategy.”

The move comes after the figures from the Department of Housing revealed that the number of homeless people in Ireland has risen above 7,000 for the time since records began.

In a report published this morning, the Simon Communities said the gap between rents and payments available to people on social welfare is continuing to grow - with just 17% of rental properties within the reach of rent supplements.

Following the release of the numbers, Focus Ireland said the introduction of the rent pressure zones was a positive step but warned that the Government is "clearly not doing all it can" to address homelessness.

Limerick and Waterford

Following the minister’s announcement this evening, the Labour Party spokesperson on housing, Jan O’Sullivan criticised the government for not including Limerick and Waterford in the designation.

She said the qualification criteria for the rent caps are “too restrictive.”

"Unfortunately my fear that places like Limerick might lose out has come to pass,” she said. 

"This is disastrous for tenants who are already struggling to pay and now face rises they can't afford. Linking rent increases to the Consumer Price Index as the Labour Party has proposed would have been a much fairer way to go. 

"The people of Limerick, Waterford and other parts of the country are now left with no protection from steep hikes - which is a direct result of this legislation." 

The new towns now included in the scheme are:

• Naas
• Sallins
• Celbridge
• Leixlip
• Rathangan
• Kildare
• Newbridge
• Slane
• Julianstown
• Duleek
• Laytown
• Bettystown
• Ashbourne
• Dunboyne
• Dunshaughlin
• Ratoath
• Bray
• Enniskerry
• Wicklow
• Douglas
• Ballincollig
• Carrigaline
• Passage West