Impact of new rent pressure rules on Ireland’s rental sector and housing market

The government has introduced sweeping changes to the RPZ framework, transitioning from a regional model to a nationwide rent control system. These changes aim to protect tenants, stabilise rents and encourage long-term investment in the rental sector 

Key features of the new RPZ rules

1. Nationwide rent controls
• All rental properties across Ireland are now subject to RPZ rules.
• Rent increases are capped at 2% annually or the Consumer Price Index (CPI), whichever is lower.
• New-build apartments (with planning notices after 10 June 2025) are exempt from the 2% cap and instead follow CPI-linked increases to incentivise development.
2. Stronger tenant protections
• No-fault evictions are significantly restricted, especially for large landlords (4+ tenancies), who will be banned from issuing no-fault evictions for leases starting after 1 March 2026.
• Rolling six-year tenancies will become the new standard, enhancing security of tenure.
3. Rent resetting rules
• Landlords can only reset rent to market levels at the end of a six-year tenancy, and only if the tenant leaves voluntarily or breaches the lease.
• Existing tenancies (before 1 March 2026) remain under the current rules, but benefit from the expanded protections.

Impacts on the rental sector

Positive effects

• Greater stability for tenants: Tenants now enjoy more predictable rent increases and longer-term security.
• Uniform protections: Tenants in previously uncovered areas now benefit from the same protections as those in RPZs.
• Encouragement for institutional investment: By offering CPI-linked rent increases for new builds, the government aims to attract long-term investors and developers.

Challenges and risks

• Landlord exit risk: Smaller landlords may exit the market due to tighter eviction rules and capped returns, potentially reducing rental supply. Non-institutional landlords are most at risk. They are bearing the interest rate risk of these assets, and any interest rate increases by the ECB will increase the debt service obligations, which are funded from a capped rent roll. Future increases could erode all headroom and affect the landlord’s debt structure.
• Reduced flexibility: The inability to reset rents during tenancies may discourage landlords from upgrading or maintaining properties.

Impacts on the broader housing market

Short-term

• Flurry of second-hand stock to the market: It's expected that marginally performing landlords will now look to exit assets and put them on the market for sale.
• Strong Asset Management: This will take place between now and the implementation date. It’s likely that units will be turned over and re-rented at higher levels in time for the cap. The underlying base levels of rent in new RPZ areas will rise.
• Build-to-rent shift: Institutional investors may look at locations outside of Dublin. Developing new schemes will allow the investor to set the rents at a fresh base in arears of under-supply.

Conclusion

It's apparent that the non-institutional landlord is under increased pressure. Landlords of scale and institutional landlords will likely prevail. Exit will be seen in areas where high-interest-rate legacy debt is funding stock.

Second-hand homes will remain strong and it’s likely that more will come into the market over the next 12 months, reducing rental supply and driving renters to the higher-rent large operators.

At Crowe, we advise investors, developers and landlords across a broad range of assets. Please get in contact with our expert team if you want to discuss the impact on your portfolio.