The Government has today announced changes to rent controls and increased tenant protections in the private rented sector to achieve its stated aims of enhancing security for tenants and certainty for landlords and investors.

Based on the Government’s press release on reforms to the rental sector, the following measures will be implemented.

National System of Rent Control

A national system of rent control will apply with rent increases for all tenancies to be capped by inflation with reference to a 2% cap applying in times of “high inflation”. Further detail will be needed to confirm whether this applies to existing and/or new tenancies.

Increased Tenant Protections

New tenancies, being those created after 1 March 2026, will benefit from the following increased protections:

• a six-year minimum term for tenants of “smaller landlords” (i.e. those with three or fewer tenancies) with restricted termination grounds – smaller landlords will only be able to terminate a tenancy: (i) during the six-year minimum term for reasons of hardship (to be defined in legislation) or if an immediate family member requires the dwelling; and (ii) at the end of the six-year term for the other “no fault” termination grounds that currently apply (sale, renovation, change of use or requirement for a family member); and
• “no fault” terminations (e.g. in the event of a sale or renovation of the property) will not be permitted by landlords of four or more tenancies except in very limited circumstances (in respect of which details have not been provided).

Resetting Rent to Market Level

All landlords will be able to reset rent to market level at the end of each six-year tenancy unless a “no fault eviction” occurs. Further detail will be needed to confirm that rent resets will be permitted where a lease is terminated as a result of a tenant breach or where a tenant leaves the tenancy voluntarily during the six-year cycle.

Comment

As with any proposals announced, the devil will be in the detail of the draft legislation – in particular, how the measures apply to existing versus new tenancies, the distinction between smaller and larger landlords and whether the rent reform and/or other proposals apply to purpose-built student accommodation.

The Government’s aim was to balance affordability and security for tenants with profitability and viability for PRS developers and investors. Several options were considered, including the measures announced today, increasing the rent cap to 4% (which media reports indicated was recommended by the Housing Agency in its options paper presented to the Government in recent weeks), retaining the existing regime, abolishing the rent control regime entirely, and introducing a reference rent model (which was recommended by the Housing Commission but which many commentators believed would be too cumbersome and administration heavy).

While commentary around the rent control measures has been extensive in recent weeks and months, it is likely that reaction from developers, investors and landlords to today’s announcements will be mixed. Regardless of any individual perspective, bringing an end to the uncertainty and speculation is, in itself, a positive development. A stable and predictable policy environment is a critical driver of investment in the sector, boosting confidence to commit capital, reducing risk and enabling long-term planning.

Time will tell if the measures announced today and any additional measures to follow will translate into an increase in PRS development and investment and whether an appropriate balance between stakeholders has been achieved.

We are monitoring developments closely and will publish further briefings as more information becomes available.

For tailored advice on the impact of today’s announcement, please contact a member of the Arthur Cox Real Estate Group.