Daft’s most recent Analysis of Dublin’s rental market shows that average rents are now higher than they were at the peak of the Celtic Tiger. There has been more than 20% growth in the past two years and there’s no sign of it slowing down.
But this hasn’t affected most tenants yet because they haven’t had their rent reviewed recently and are still paying as little as they were in 2015. These tenants may be in for a big shock in 2017.
Here is the reason why…
Since December 2015, it is only legal to review the rent on a property every 24 months and not annually. This change included anyone already in a lease prior to the Amendment to the Residential Tenancies Act. This is a rent freeze for two years which was introduced to slow the property market down.
So anyone who leased a property or had their rent reviewed in 2015 is still on that lower level of rent….. but their rent reviews are coming!
Here is a simple example of a situation facing hundreds of thousands of tenants in the next year:
January 2015 – Jack & Jill moved into a new apartment on a 12 month lease at €1200.00 per month, the going rate for this apartment in January 2015.
January 2016 – When the lease term expired in January 2016, rents in the area had increased by c. 10% to €1350.00 per month but luckily for Jack & Jill, the new rules took effect and thus the rent cannot be reviewed until January 2017… so they stay in the apartment for another year.
January 2017 – So what happens in January 2017? Well, the landlord carries out a 90 day rent review to the current market rent which has again increased by c. 10% to €1500.00 per month.
This is a 25% increase for Jack & Jill and in this case an additional €3600.00 annually. This kind of increase will be common practice in the coming months and tenants who are in this situation should prepare for it and make contact with their landlord / agent to discuss well in advance of their review dates.
If you’re a landlord with tenants that moved in or had their last rent review in 2015, you should start thinking about your options in advance. Earnest can help advise and guide both tenants and landlords on the steps to follow.