Rent freeze - when does it end?

Discussion in 'Property investment and tenants' rights' started by paddynaas, 23 Oct 2018.

  1. paddynaas

    paddynaas New Member

    Posts:
    3
    Hello folks


    I have been onto the RTB several times and they dont seem to have an answer to my question, and i get the impression they couldn't be bothered getting an answer for me either.

    I have a house rented out in a rent controlled area. The rent is well under market rental values and has been for a few years. I increased the rent in June 2014, i think it was and couldnt increase it for a year, within that year, the rent freeze came in. My argument was that I was unable to increase the rent and then after a year, I was again unable to increase by more than 4%.

    The RTB told me that the rent free and maximum increase for 4% per year was to finish in 2019 and I would be able to increase my rent inline with other local rental properties.

    So, My question is does anyone know when this will happen?

    Many thanks Paddy
     
  2. Sarenco

    Sarenco Frequent Poster

    Posts:
    5,269
    The legislation provides for the automatic expiry of the designation of an area as a rent pressure zone (RPZ) after three years. So, in the case of most areas that have been designated as RPZs that means 24 December 2019.

    Some posters think it is inevitable that the legislation will be amended to extend this period but I think that would be constitutionally suspect.

    https://www.askaboutmoney.com/threa...an-rpz-be-extended-beyond-three-years.208048/
     
  3. Magpie

    Magpie Frequent Poster

    Posts:
    214
    Does that mean that the end of next year all landlords can put the rent up to whatever they like? Because that would be......disastrous.
     
  4. Sarenco

    Sarenco Frequent Poster

    Posts:
    5,269
    No.

    Outside a RPZ (or once an area ceases to be a RPZ), the rent cannot be set above the local market rents for similar properties and three examples for similar properties in the locality, or a comparable area, must be presented to demonstrate this.
     
  5. Magpie

    Magpie Frequent Poster

    Posts:
    214
    Yes but if the RPZ ends then all an agent has to do is put up all their rents as much as they like and then use 3 of their properties to "prove" that those new rents are now the market rents. It would be a shell game and rents would rocket, as they did when agents found out about the incoming RPZ's before the tenants did and pushed through massive rent rises right before the start date.
     
  6. llgon

    llgon Frequent Poster

    Posts:
    361
    Don't remember this happening!

    Any evidence to show that agents found out before tenants?
    And of massive rent rises right before the start date?
     
  7. Sarenco

    Sarenco Frequent Poster

    Posts:
    5,269
    Most landlords (or their agents) weren’t in a position to raise rents at that time because of the 2-year embargo on rent reviews introduced by the previous Government and there is no evidence that there was a spike in rents at that time.

    The RPZ regime has certainly resulted in reduced rents than would otherwise be the case for some sitting tenants but it hasn’t resulted in lower overall rents.

    Artificially trying to control rents doesn’t work - it’s counter-productive.
     
  8. Magpie

    Magpie Frequent Poster

    Posts:
    214

    Yes. My own rent was raised 46% (they tried for 60%) one week before the announcement of the RPZ, and I know that the agent did the same to several other local tenants, and they were hardly the only ones.
     
  9. Sarenco

    Sarenco Frequent Poster

    Posts:
    5,269
    @Magpie

    You must have been on a pretty sweet deal if you were paying almost 50% below the prevailing market rent at the time.
     
  10. llgon

    llgon Frequent Poster

    Posts:
    361
    When the RPZs were introduced by Simon Coveney in 2016 it was with immediate effect. I would think that Mr Coveney himself did not know very far in advance that this was going to happen. As Sarenco has implied it sounds like your local agent was wisely trying to clear his/her books of rentals that were so far below the market rate. As a matter of interest when did your rent review at the time commence?
     
  11. Magpie

    Magpie Frequent Poster

    Posts:
    214
    My RPZ was one of the later ones added, it was not with immediate effect and the agents absolutely knew before it was publicly announced (a staff member told me this) and the rent was not far below the market rent. All rents jumped massively at the same time in the area. Going from an average of 900-1000 to 1400-1600 in a matter of months.
     
  12. Magpie

    Magpie Frequent Poster

    Posts:
    214
    No. House was not in great repair and the rents all climbed massively in a very short period
     
  13. paddynaas

    paddynaas New Member

    Posts:
    3
    Many thanks for the replies especially @Sarenco

    Hard to know what to do, should I send a letter and raise the rent by the (1.04)^2 or should i hold off for dec 2019 and then send a latter informing the tenants of the rent increase.

    Tenants are on the HAP scheme and are absolutely lovely btw (thankfully)
     
  14. llgon

    llgon Frequent Poster

    Posts:
    361
    Fair enough, there are obviously a lot of flaws with the RPZ regime and I think its introduction did have a knock-on effect in areas that weren't zoned. Landlords in these areas learned that they needed to raise their rents to market levels quickly or they would be stuck if they were added to the RPZs. In a lot of cases they would have been justified in doing this but in your case it sounds like it wasn't.

    Does the RTB Rent Index for your area reflect the 50% increase that happened?
     
  15. moneymakeover

    moneymakeover Frequent Poster

    Posts:
    412
    Fyi
    1.04^2=1.08
     
  16. PaxmanK

    PaxmanK Frequent Poster

    Posts:
    130
    Would this do it?

    Drop a letter stating the new rent in the letterbox just after midnight on the night if the expiry. Include lots of examples of other rents in the area. And state that the new rent takes effect 3 months later.

    Also isn't the rule on rpz if rents that's rents have to rise by a certain amount more than 3 quarters in a row. I bet there are areas now where that doesn't happen.
     
  17. paddynaas

    paddynaas New Member

    Posts:
    3
    PAxmanK what do you mean by this - I dont follow you thanks
     
  18. PaxmanK

    PaxmanK Frequent Poster

    Posts:
    130
    There is a legal definition of a rent pressure zone somewhere though I can't locate it. Some areas should be near falling out of the defining criteria now already.
     
  19. Purple

    Purple Frequent Poster

    Posts:
    8,716
    There's no chance of the RPZ's being removed. It would be political suicide. They will roll on and on.
     
  20. PaxmanK

    PaxmanK Frequent Poster

    Posts:
    130
    And it's economic and social suicide to keep them.
    But i think you are right politicians care more about their chances of getting votes than about what really happens to the people who vote for them.
    People thinking rent control will will help them and giving their vote based on that is turkeys voting for Christmas.
    They just dont realise it