Taoiseach Micheál Martin has defended the Irish government’s policy of linking rent increases to the Consumer Price Index (CPI) as a positive move, despite soaring inflation.
A recent change in the law will only allow landlords to increase rent in rent pressure zones by the cost of inflation and not 4% every two years.
Martin stated that this new change was reflective of the economic advice that the Coalition had received.
It was reported by The Irish Independent that the Harmonised Index of Consumer Prices hit a 13-year high in August when it rose to 3%.
Housing Minister Darragh O’Brien had promised that the move to link rent increases to inflation would significantly reduce the level of rent increases in rent pressure zones.
Speaking in New York, the Taoiseach stated, “We need to be fair here. The linking to the rent index was a positive move in the overall context of reducing the level of increases that we had been experiencing,”.
“Now we are in the middle of an inflationary spike that has an international dimension to it, largely because of Covid-19 and the interruption of supply chains, and the increased cost of commodities across the globe.”
“Now the international jury is out as to how long this will last – is it a temporary spike? And the ECB has been saying to us, at EU leadership level, that they see it as a temporary spike in prices that will reduce in the next while.”
Martin added that there was strong advice issued to the government that freezing rents would be “unconstitutional”.
IMAGE – “Dáil Éireann – Election of Taoiseach – 27 June 2020” by Houses of the Oireachtas is licensed under CC BY 2.0