Limerick surveyor claims rent caps in designated zones ‘deter’ buyers

Maria Flannery

Reporter:

Maria Flannery

Limerick surveyor claims rent caps in designated zones ‘deter’ buyers

A PROPERTY surveyor and valuer in Limerick has warned that rent caps in designated rent pressure zones could deter new investors into the market, and potentially reduce the already low rental stock.

Tony Wallace of Rooney’s Auctioneers, said that although the implementation of the rent pressure zones has “provided additional security to tenants”, they could also have negative consequences for the market.

Potential landlords could be deterred from buying investment property in a rent pressure zone, said Mr Wallace, further decreasing the amount of rental properties available.

“In these areas, called Rent Pressure Zones, rents will only be able to rise according to a prescribed formula by a maximum of 4 percent annually. For an area to be designated a rent pressure zone, the annual rent inflation must have been 7 percent or higher in four of the last six quarters,” said Mr Wallace.

If areas in Limerick meet that criteria, a cap on rents may be put in place.

“While rent controls have curbed rent increases in the short term they may also curb investment at this critical time. Markets abhor uncertainty and the constant flux around policy, taxation and legislation has led to investors exiting the market at the precise moment when we need more investment and supply,” said Mr Wallace.

“The current rental crisis is mainly due to the lack of supply, and the current situation of unsustainable rent rises could continue until that is addressed.