The government’s own research warned in 2019 that cuckoo funds were unlikely to help boost the supply of affordable housing but could instead develop ‘monopolistic power’ in parts of the market they came to dominate.

The report from the Department of Finance warned that should the built-to-rent investment sector continue to grow it would lead to socio-economic division in some urban areas in the longer-term.

Ministers and the attorney general are this week scrambling to come up with a policy response to address public anger at the dramatic increase in the size of institutional landlords which have crowded first time buyers and ordinary house buyers out of parts of the market in Dublin and commuter counties.

But a 2019 report from the Department of Finance set out the potential dangers as well as the limited impact the sector would have on boosting affordability.

In just two years since that report was published, cuckoo funds have dramatically accelerated their acquisitions of thousands of mostly new homes.

Their share of the market is now approaching 18,000 units and in the past 15 months they have spent around €2.4bn buying up homes.

Build-to-let investment in housing tended to supply apartments at the premium end of the market, “unsuitable for people on average incomes”, the report from the 2019 Department of Finance said.

Institutional investment is “unlikely to have a direct impact on increased affordability”, however, an increase in overall supply should place downward pressure on rents, the report added.

Earlier this week figures from Daft.ie showed the cost of renting doubled in the past decade.

The report from the Department of Finance also warned there was a risk that “at sufficient scale” a fund or group of investors could, over time, “develop monopolistic or oligopolistic pricing power”.

A monopoly occurs when a single company is dominant in the marketplace, while oligopolies occur when there is a small number of sellers in the market.

“Theoretically, such price-setting power could be attained at a local level given certain market conditions and sufficient scale,” the report from the Department said.

In Ireland the build-to-rent sector is dominated by a handful of huge players who now regularly buy hundreds of apartments and houses at a time in schemes that are no longer offered to individual buyers.

Stock market listed Ires Reit remains the biggest player in the market, followed by the likes of Kennedy Wilson, Urbeo, LRC Group and Comer Group, which each have between 1,050 and 2,500 units.

A spokesperson for the Department of Finance yesterday said: “The report estimated that institutional landlords represented approximately 4pc of all tenancies in the State (assuming that all properties owned by institutional landlords are rented).

“This indicated a limited scope for monopolistic or oligopolistic power in a market with limited market share”.

The report warned that policymakers need to consider the long-term implications of the increased presence of institutional investors in the country.