Move to tackle rents is ‘too little, too late’ as rates expected to rise

A government decision to increase rent supplement has been deemed too little, too late and possibly even a gift for landlords to allow them hike rents further.

Maximum rent limits under the scheme will now increase in every part of Ireland, with an average rise of 29% being given to tenants in Dublin.

The new limits come while rents are frozen until next year and after recent sharp rises which have put rates in some areas right back to their peak levels during the boom.

The Cabinet yesterday agreed the new limits will come into effect next week and will cost €15m this year.

Social Protection Minister Leo Varadkar said the increased top-up payments would be above 2007 levels for rent supplement but not as much as to be in line with current market rates.

Rent supplement is generally paid to people who cannot afford their accommodation, including those on social welfare.

Mr Varadkar said the new limits would be applicable when tenants saw rent increases or for new applications. A two-year rent freeze is in place to ensure rates were not hiked up, he said.

Rent limits will increase by 25% in Laois and Roscommon, 21% in Cork City and Galway City, 19% in Westmeath, Kildare, and Louth, while Cavan and Donegal will get an average 15% rise in capped rates. The rent limit increase of 29% in Dublin is outside the Fingal area.

Increases will be on a county-by-county basis. Housing assistance payments, a support for those with long-term housing needs, will also rise under the changes.

Mr Varadkar conceded that rent rates were likely to increase in “the next year or two” when the current freeze is lifted.

“These new rent limits reflect the fact that rents are rising right across Ireland and are back to their peak levels in some places.”

Some housing support groups expressed concern that increased supplements were too little, too late. Furthermore, there are worries that landlords may use the extra rent aid as an excuse to bump up rates.

The Dublin Simon Community welcomed the increase in rent supplements, but the agency’s Sam McGuinness said: “People have lost their homes because of rent supplement being so low in the past.”

He said rents generally had increased by 32% since spring 2012 and that tenants need long-term security and for rent rates in future to be linked to the consumer price index.

Housing Minister Simon Coveney said the new top-up levels would help prevent more people becoming homeless. A long-term plan on the housing crisis will be completed by Mr Coveney next month.

Housing Minister Simon Coveney

Mr Varadkar said that discretion among local authorities could still be exercised where rent supplement rates can be increased at an individual level.

It is also hoped that the new top levels will stop those people on low incomes in affordable accommodation using extra cash to meet their rents.

Fianna Fáil yesterday pointed to the fact that the supply and confidence deal with Fine Gael in power has included an agreement to increase rent supplement.

Ministers denied they were trying to shut the door after the horse had bolted, even though the Simon Community pointed out that the majority of rental properties were in fact out of people’s reach and that aid payments need to be increased in line with market rates.

The Peter McVerry Trust welcomed the rate changes, saying: “Prevention, which in this case means keeping people in their existing rental accommodation, is a critical measure in combating homelessness.”