Dáil Éireann - Volume 681 - 28 April, 2009
Written Answers. - Private Rented Accommodation.
Deputy Aengus Ó Snodaigh Deputy Aengus Ó Snodaigh
Deputy Aengus Ó Snodaigh asked the Minister for Social and Family Affairs her analysis of data from the Private Residential Tenancies Board regarding trends in the private rental sector for the past 12 months. [16249/09]
Deputy Mary Hanafin Deputy Mary Hanafin
Deputy Mary Hanafin: The purpose of the rent supplement scheme is to provide short-term support to eligible people living in private rented accommodation whose means are insufficient to meet their accommodation costs and who do not have accommodation available to them from any other source.
In recent years a significant number of people have come to rely on rent supplement for extended periods. There are currently over 84,700 people in receipt of rent supplement, an increase of almost 42% since the end of December 2007.
Rent supplements are subject to a limit on the amount of rent that an applicant for rent supplement may incur. Rent limits are set at levels that enable different types of eligible households to secure and retain basic suitable rented accommodation, having regard to different rental market conditions that prevail in various parts of the State. The objective is to ensure  that rent supplement is not paid in respect of overly expensive accommodation having regard to the size of the household and market conditions.
Setting or retaining maximum rent limits at a higher level than are justified by the open market can have a distorting effect on the rental market, leading to a more general rise in rent levels and in landlord income. This in turn may worsen the affordability of rental accommodation unnecessarily, with particular negative impact for those tenants on lower incomes.
Maximum rent limits are prescribed in regulations and are time limited so that they can be adjusted in the light of rent levels generally. The most recent regulations cover the period to 31 December 2009.
The recent Supplementary Budget provided for changes to be made to the rent supplement scheme. One of the measures being introduced is the reduction in the maximum level of rent supplement payable by the State in respect of all new tenancies or on renewals of tenancies. The limits will be reduced by up 6% to 7% on average, ranging up to 10%, depending on the geographical area and household size and by reference to an analysis of rent supplement and the Private Residential Tenancies Board rent data as well as the downward trends in private rents as recently published by the CSO.
Data was provided to the Department by the Private Residential Tenancies Board on over 340,000 tenancies containing tenancy lease details up to mid-December 2008. The analysis of this data was confined to 116,000 property descriptions which met the equivalent household types used by the Department to determine rent limits. A high level analysis of the actual rents paid by these 116,000 tenants indicated that rent levels had fallen by varying percentages per county and depending on household type.
In reviewing rent levels, it was also necessary to take account of prevailing rent levels in the private rental sector generally, including an analysis of the “Private Rented Index” produced by the Central Statistics Office in March 2009 as well as data on asking prices for rent by Daft.ie, the property website, published in February 2009. According to the CSO private rent index, rents fall by almost 11% in 2008 on average and by 7 % between November 2008 and February 2009. Daft found that rents fell by almost 12% in the past year and that rents outside Dublin fell by 10% over the course of 2008 and by over 13% on average in Dublin. Daft also reported that the number of rental properties on the market more than doubled in that time.
Furthermore, an analysis of rent supplement data indicates that 34% of rent supplements are currently paid below the statutory rent limits indicating that accommodation is more readily available to rent supplement tenants than heretofore. All of the private rent sector indicators show that rents have fallen considerably in the past 12 months.
Dáil Éireann 681 Written Answers. Private Rented Accommodation.