One in four in rented accommodation spend over 33% of wages on rent, says ESRI

ONE in four people in rented accommodation spend more than 33 % of their wages on rent.

A survey of 40,000 households also found a lack of central heating for the poor and elderly remain serious problems, despite significant improvements in the housing stock over the past decade.

The study by the Economic and Social Research Institute shows that 28% of private tenants pay more than a third of their income on housing compared to just 6% of mortgage holders.

The one-third of income ratio is widely used by banks and building societies as the key determinant of a person’s ability to repay a housing loan.

Although jJust one per cent1% of local authority tenants spend this ratio of their income on rent, but 33% of them still claim they find housing costs a heavy burden.

ESRI researcher, Dorothy Watson said many council tenants experience financial difficulties with regard to other costs of housing apart from rent, such as electricity and other fuel bills.

The report also provides evidence that many private tenants are caught in a trap where they end up spending more on housing than most mortgage holders. People living in private rented accommodation pay an average monthly rent of 609 compared to 457 for mortgage holders according to the survey. However, first-time buyers who purchased a home within the last five years pay an average mortgage of 611 per month.

Contrary to legislation, 37% of tenants said they have not been provided with a formal lease or rent-book by their landlord.

Overall, the Irish National Survey of Housing Quality 2001-2002 demonstrates that the vast majority of householders are satisfied with the general condition of their accommodation, neighbourhood and running costs.

But, despite the fact that the proportion of households with central heating rose to 90% from 59% since 1991, a quarter of elderly people living alone and 30% of local authority tenants still lack this basic facility.

Ms Watson said that residents of local authority houses, in general, also live in a less favourable conditions thant other types of house-dwellers.

Launching the report, Housing Minister Noel Ahern claimed the sharp increase in the number of new homes over the past decade was a reflection of significant economic growth in recent years.

Mr Ahern said 2002 represented the eight consecutive year of record house completions with a further 60,000 new homes due to be constructed by the end of this year.

Ireland’s housing stock is now considerably newer than many other EU countries with 43% of homes having being built since 1980 compared to 13% in the UK and 11% in Germany. Ruling out the re-introduction of rent control mechanisms, the Minister said private rents had fallen in the past year which would help to stabilise the situation for tenants. He also claimed the new Residential Tenancies Bill would provide greater protection to tenants when enacted.