Rent subsidies capped to stop greedy landlords

SOCIAL Welfare Minister Mary Coughlan has taken action against greedy landlords who have been hiking up rents for tenants on low incomes.

Figures indicate that landlords have been increasing rents in response to rent allowance limits set by health boards.

Rent allowance is paid by health boards to thousands of tenants on social welfare who can't afford to pay the high rents charged by private landlords.

Ms Coughlan has now moved to freeze the rent supplements at the present levels and restrain landlords from raising rents.

"I would expect that apart from helping to ease inflation, a price capping would lead to a price freeze but in some instances a reduction in rent," she said.

However Labour's social welfare spokesman, Willie Penrose said the measure was being sold to the public as a way of combating rent increases but was nothing of the sort.

"This housing cut means tens of thousands of low income tenants will then be exposed to the full extent of rent increases," he said.

"These payments have been increasing in recent years in line with the increases in rents. Now, the Government will cap the payments, exposing poor tenants to the full impact of the rent increases being imposed by landlords."

Mr Penrose said that if the Government was serious about securing affordable rental accommodation for people on low incomes it should place a cap on rent in general.

While rents have been increasing dramatically in recent years, fresh figures show that the rise in the cost of rental accommodation is beginning to slow.

Rent allowance has never been capped before. Tenants who receive a rent supplement account for more than one third of the private rented sector.

The allowance limit varies depending on the area a person is living. For example, the maximum rent level a single person can incur in the Dublin area and still qualify for Rent Supplement is 107 a week, compared to 85 in the Mid-Western region.

Mr Penrose said the Government had also failed to introduce legislation to protect tenants, which was recommended by the Commission on the Private Rented Sector almost three years ago. But Ms Coughlan said the recently established Private Residential Tenancies Board would be fulfilling its remit of mediating on future discussions about appropriate rent levels.