Rent pressure zones were introduced under the Planning and Development (Housing) and Residential Tenancies Act 2016 and were intended to moderate increases in rent for tenants.
Currently, in Cork, there are a number of areas that are included in the rent pressure zones being Cork city itself, Ballincollig – Carrigaline and Cobh. Other towns such as Midleton, Youghal and Fermoy for example are not currently classed as rent pressure zones despite the large increases in rent in these towns.
For a town or area to be included in a rent pressure zone, two criteria must be met;
1. Rents must have increased by more than 7% in four of the last six quarters
2. Average rents in the last quarter must be above the national average as measured by the National Indicative Rent in the RTB’s Rent Index Report
The most recent RTB Index Rent Report which is for Q1 2018 put average national rents at €1,060 which was a 7.1% increase year on year and a 0.4% increase from the previous quarter.
In comparison, the following averages were given for Q1 2018 for the Cork based areas;
Cork City rents were listed at €1,075
Ballincollig – Carriagaline at €1,251,
Cobh at €1,074
The greater East Cork LEA area was lower at €892.
Thus whilst rents may have jumped in successive quarters in areas outside current rent pressure zones, they can still fail the criteria for inclusion as rents are listed as below the national average.
For areas in and around Cork City already included under the rent pressure zones, rent increases for existing tenants are limited to a maximum 4% a year. Landlords must still show show three comparable rents when writing to tenants and the proposed rent must be in line with local market rates when seeking a rent review.
The formulae devised to calculate rent increases in a rent pressure zone is as follows;
R x (1 + 0.04 x t/m)
calculations should be done working from right to left
R= The amount of rent last set under a tenancy for the dwelling (the current rent amount)
t = The number of months between the date the current rent came in to effect and the date the new rent amount will come in to effect.
m = you must enter 24 OR 12
The RTB website has a fairly comprehensive information section on rent pressure zones and the minutiae along with a calculator whereby you simply input the information to determine the potential increase in rent.
The PRTB rent indices and reports can be accessed here and make for interesting reading for anybody seeking up to date information on Irish property rental trends.