Over the past decade, Irish governments have introduced a substantial body of residential tenancy legislation aimed at protecting tenants amidst rising rents and often at the disadvantage of landlords. Measures have included longer tenancy cycles, extended notice periods, and the now-familiar Rent Pressure Zones (RPZs), where rent increases have been capped—most recently at the lower of 2% or HICP.
While these controls have aimed to stabilise the market, rents have continued to climb, and the imbalance between supply and demand has only worsened. Our research shows that Ireland has shifted from being one of the least regulated rental markets to the second most regulated in the region. This has had stark consequences: institutional investment in the living sector dropped from nearly €3 billion in 2019 to just over €500 million in 2024.
Small landlords have also been leaving the rental sector in large numbers. For several years over 60% of our sellers are landlords.
In this context, this week’s government review of the rental sector marks a welcome, if incremental, step forward. Several key changes will take effect from March 1, 2026:
- RPZ rules will be extended nationwide (this had already taken place).
- For new constructions post-March 2026, rent increases will be capped by CPI (inflation) only.
- The existing “lower of 2% or HICP” cap will continue to apply to all other tenancies.
- New tenancies will follow a rolling six-year model.
- Rent resets to market value will be allowed when a tenant leaves of their volition or at the end of each six-year tenancy.
- No confirmation yet on how these changes impact student accommodation.
In our view, these changes slightly improve the investment landscape. The ability to reset rents at the start of a new tenancy, and CPI-linked increases for new construction, are both welcome. However, we question the logic of having dual rent cap systems—one for new builds, another for existing stock. A universal CPI linkage would be clearer and more equitable.
The bigger picture remains unchanged: viability is still constrained. Without targeted financial supports or tax incentives, the private rental sector will continue to struggle to attract large-scale investment.
This is a modest step in the right direction—but much more is needed to restore confidence and capital to Ireland’s rental market.
Owen Reilly, 23rd June 2025.
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