This is a good start.
1 and 2 beds are still overpriced (in Dublin) because of RA.
The state controls about 40% of the rental market and should do more with such enormous market power.
Hopefully, these cuts will cause rents to go down in the major cities. Rent allowance has been killing the rental market for far too long. It was the base rate for years. 1 beds are particularly overpriced across the board.
Of course they are. Once you are in receipt of RA, it doesn't reduce or stop, unless your situation changes of course.
In yesterday's Irish Times Joan Burton said that "she was aware of the difficulties that landlords faced, but said she was also sure landlords could understand that the Government had to look for savings...We’d like to see the Department and the taxpayer getting good value for money from landlords, from providers of accommodation, in relation to those 97,000 people who are supported on rent allowance.” The Government clearly has landlords in its sights, but is in a position to use the tenants to do the negotiation on its behalf.
Did they not introduce a household charge, isn't that going directly after landlords?
What do you want them to do, negotiate rents on the rent allowance recipients behalf?
The Social Protection doesn't negotiate, they publish a limit which is non negotiable. The tenant and the landlord are left to negotiate something which is non negotiable. This doesn't add any value to the process. The SP has the landlords PPS and they know how much rent they are charging the tenant. If they want the landlord to lower this, I don't see why they can't write directly to him and tell him. If he agrees, the SP continues to pay the tenant a rent supplement, at the reduced rate. If the landlord doesn't agree, then the SP reduces the rent supplement to ZERO, leaving the tenant with no choice but to leave the property.
What actually happens is that the Social Protection sent me rent review forms in May, then again in Dec and in both cases I sent these onto the landlord to confirm the rent. SP then reduced the rent limits in January, so when the Dec form comes back it will be rejected for being over the limit, I will be sent a new set of forms which I will fill in again, send to the landlord again in the hope he will agree to the reduced amount, and when I get those back for the second time I will send them to Social Protection. Lots more form filling, form checking and paper consumption than if the Social Protection contacted the landlord directly.
It's funny how the government has landlords who provide accommodation to LA tenants but they are doing nothing about upward only rents on commercial properties.
There is confusion (amongst people who don't recieve Rent Supplement) as to what the entitlements actually are.
Some people here see 'single person living alone in Dublin, maximum rent supplement- €530' and assume they get €530 per month towards their rent. They don't. They get €530 minus their contribution, which roughly works out as €410 per month towards the rent, the rest they pay themselves.
Since the changes, the same person, now only gets €475 towards the rent, and has to contribute more per week. And if their monthly rent is greater than €475, then they are no longer entitled to any supplement.
My feeling on this is that some landlords will renegotiate, but most won't. Remember a lot of them have mortgages that are greater than the rent they take in, so it's not in their interest. So, we'll have a glut of evictions, people leaving homes they've lived in for years, and overall rents staying the same
A much fairer way (for unemployed tenants anyway) would have been to increase their contributions even more. I think most people on Rent Supplement would take that now, but instead it seems we have a government decision based on improving the property market, whilst making the cuts they needed in Social Protection the easy way.
There's a minor ground-swell about this developing, and it'll only get worse once people start receiving the letters. It could get interesting and I wouldn't rule out some sort of review of the whole thing.
If they do evict, who will be the new tenants? There are not queues of tenants waiting to fill the gap. Remember alot of those landlords who run old bedsits are more likely to be mortgage free or have tiny mortgages, each landlord's financial position is different.
Its about improving the lives of workers who are paying extortionate rents to compete with welfare tenants and its about saving taxpayers money. Nothing to do with 'improving the property market'.
That's an interesting point. I have RS tenants in D15, in a modern (1990s) property. I have a managable mortgage on the place as I bought well before the peak and never bought it as an investment (used to live in it), so have room to reduce the rent a bit (have done with previous reductions in RS as my tenants are good and worth keeping) but I reckon many of the better properties (built 2000-> could have substantial (investment: read higher interest rates) mortgages on them and these are the ones that will see evictions as landlords are forced to give up trying to cover mortgages from their own pay/dole.
Could we see a situation where owners of grotty bedsits (who are more likely to be mortgage free) can keep their rent steady (it'll still be cheaper than a nice 3 bed house) due to demand from tenants evicted from suburban properties by bankrupt landlords?
Interesting times ahead.
Indeed. One thing I know is happening is people are moving from the more expensive counties to some of the better value counties as their RS, even though lower, goes further. For example €450 will rent you something bigger/nicer in Leitrim than €750 will Fingal. I know three people who have done this in the last six months. It's a form of welfare tourism I suppose.
To say that private rents are high because of rent allowance is wrong. Only about 15% of landlords accept rent allowance in the first place, so I find it very hard to believe that such a minority are suddenly responsible for the high rents in this country.
I paid €1100 a month for a 1-bed appartment four years ago, roughly about double the maximum limit of Rent Supplment at the time. Rent Allowance has very little affect on overall rents. The only place where it might have some influence, is on bedsits and studios which are over-priced
Wrong. Rent Supplement controls 50% of the private rental sector market. Some RS tenants are long term(like some of my neighbours) hence lack of adverts.
You paid 1100 as a single person for a 1bed, the RS limit was about the same for a couple for a 1bed at the time. RS allocation is based on number of humans claiming, not on the number of beds needed.
There is no question that taxpayer-funded rent supplement distorts the private rental market, it creates an artifical floor for rents throughout the State.
An exception would be where the supply of accomodation exceeds demand such as in rural Mayo, asking rents have fallen well below the local maximum ceilings for rent supplement.
the government should just move all those getting RA into Nama controlled housing and force the private sector landlords to drop the rent prices & upgrade those grotty little bedsits into proper flats with all the basic amenities in order to be able to find tenants