Taoiseach Enda Kenny has defended Government plans to cap rent rises in Cork and Dublin for the next three years, The Irish Examiner’s Fiachra Ó Cionnaith in Brussels.

The Taoiseach is insisting the move is a “carefully thought-out process” which will protect “many thousands of tenants”.

The Fine Gael leader made the comment as he rejected claims a deal struck with Fianna Fáil to potentially extend the plan to other cities early next year is a “watering down” of the initial strictly limited move.

Under plans passed by the Dáil yesterday, rent “pressure zones” are set to be introduced in Ireland’s two largest cities from next month, capping price rises for existing renters to a maximum of 4% a year for the next three years.

The move was put before Cabinet by Housing Minister Simon Coveney this week, before facing severe criticism from Fianna Fáil and other parties over claims the 4% annual cap was too high and that people in other parts of the country were being left without help.

As part of a deal between Fine Gael and Fianna Fáil which has been seen as a victory for Mr Coveney, the 4% rate will remain in place with the possibility of extending the move to other cities and commuter belts to be reviewed early next year.

However, while the decision has led to some concern that landlords in areas outside of Cork and Dublin may now increase rents before any future potential changes are introduced – and ongoing concerns the cap will still allow a 12% rise over the next three years – Mr Kenny insisted the policy has been carefully thought-out.

Speaking in Brussels after the European Council leaders summit, the Taoiseach said “many thousands of tenants” will be protected by the new rules who would otherwise “be fearful of the next rent increase coming”.

“No, not at all,” he said when asked if the deal with Fianna Fáil to potentially expand the plan to other parts of the country early next year shows it is being watered down.

“What was put in place, and what was decided on during the week, was a very carefully thought out process.

“One [aspect] was taxation to be reflected on by a commission to be set up by Finance Minister Michael Noonan in January.

“One was the process and conditions when a rent zone would be authorised. And the third was a very carefully thought out level of a 4% cap which would apply.

“That’s designed to protect many thousands of tenants who would be fearful of the next rent increase coming,” he said.