Housing & Planning

Housing RPZs: What will a new rental regulation system mean for renters in Ireland?

Q&A: The Government wants to attract more private landlords, but how will that affect rents?

Taoiseach Micheál Martin has argued that a more stable policy environment is needed to encourage private investment in the rental market. Photograph: Alan Betson
Taoiseach Micheál Martin has argued that a more stable policy environment is needed to encourage private investment in the rental market. Photograph: Alan Betson
Niamh Towey's picture
Niamh Towey
Tue Feb 11 2025 - 15:36

The regulation of the Irish rental market could change from the existing rent pressure zone (RPZ) system to a “reference rent” system under proposals being considered by the Housing Agency.

But what would this change mean for renters, and how would it work?

Is the Government considering scrapping rent controls altogether?

No, it doesn’t appear so, though nothing has been decided yet. The current RPZ system is due to expire at the end of this year and the Housing Agency is reviewing its efficacy and considering alternative forms of control. One alternative being considered is a reference rent system, where rent increases would be determined by a reference rent for local homes of similar quality.

How does the RPZ system work now?

An RPZ is a designated area where rent increases are capped at 2 per cent per year, or the rate of inflation, whichever is lower. There are a total of 65 RPZs in the State. A full list of all RPZs is available on the Housing Agency’s website.

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Why are they changing it?

Taoiseach Micheál Martin has argued that a more stable policy environment is needed to encourage private investment in the rental market. Dermot O’Leary of Goodbody Stockbrokers says in order to increase the supply of housing by the amount required under new targets, Ireland “needs to be able to attract foreign capital”.

“At the moment, one of the constraints to that investment coming into Ireland is the strictness of the rent control regime in Ireland relative to other jurisdictions,” he adds.

What are the problems with RPZ?

The Housing Commission report, published last year, said RPZs were always envisaged as a temporary measure and are no longer fit for purpose seven years later.

It found that noncompliance with RPZ regulations is an issue, and that sanctions to tackle this are not being used to the full effect. The report also found landlords may not continue to invest in a property if they feel the rental return is not sufficient. It also suggested that the RPZ system created a two-tier rental market where existing tenants enjoy lower rents while those seeking a new tenancy are faced with significantly higher rents.

What could replace it?

One of the options being considered is the reference rent system. It would apply nationwide rather than just in certain zones, and the rate set as the reference rent would be informed by Residential Tenancies Board data on the size and type of local homes. This form of rent control would apply between tenancies, so a landlord could not increase the rent by more than the controlled amount when a new tenancy begins.

Could my rent increase in this new system?

That is not yet clear, as we do not know how a change in rent controls would be transitioned. It does seem possible that in some areas the reference rent rate could be higher than the current rent charged for certain tenancies. Lorcan Sirr, housing lecturer at Technological University Dublin, says he “cannot see rents for the majority of tenants coming down” under any new system.

If the purpose of changing the regulations is to attract more private investment, the logic would follow that rents would increase to allow for this. However, one option for the Government would be to maintain tighter controls of those currently in tenancies so there is no sudden change to what they are paying.