IRELAND - A ban on upward-only rent increases will cause a "substantial" loss to investors, an Irish opposition TD has warned.

Addressing the Dáil - the Irish lower house - Pearse Doherty, opposition Sinn Féin spokesman for finance, warned that a proposed ban on upward-only rent increases would have a significant impact on National Asset Management Agency's (NAMA) holdings.

He cited an as yet unpublished survey by DKM Economic Consultants and the Irish Association of Investment Managers, estimating the changes would reduce property values by as much as €14bn.

Doherty suggested that the law would result in a "substantial loss" for the state, through both its bank holdings and NAMA, with Fianna Fáil TD Michael McGrath adding that, while the changes would be beneficial for both tenants and retails, it would impact financial institutions.

Brian Hayes, a member of the ruling Fine Gael party, countered that it was in the government's interest to ensure value for money when leasing its properties, stating total lease expenditure was expected to drop by €32m compared with 2009.

"I must admit I would like to see it come down sooner, as it is important to get better value for money when we are running a deficit reduction programme," he said.

"We all want to reduce leases and the amount we are spending on them. There are many cases where one arm of the state is renting from another arm of the state."

A legal challenge is expected should the government go ahead with the ban, with around 40% of lease losses expected to be suffered by banks and NAMA.

NAMA did not respond to questions about the impact of the law on its holdings or the extent of discussions between it and the government at time of print.