Kerry’s housing support payments breach limits as rental market squeeze continues
The KerrymanNew figures show the majority of housing support payments in Kerry are over their defined limit as rent prices continue to rise dramatically.
Two thirds of Housing Assistance Payments (HAP) this month were above their defined limit, while one third were at the hard statutory limit of 135 per cent.
HAP is a social housing support for people who have a long-term housing need and is provided by local authorities.
The max payment that can be made to recipients is defined by applicants’ family situation and county, with extra provision for the local authority to increase payments up to 35 per cent over the limit.
Rental prices have risen dramatically in Kerry, with rent for a one-bedroom apartment costing on average 50 per cent more than it did in 2020.
Councillor Maura Healy-Rae believes the high proportion of HAP over the 100% limit reflects this escalation in rent and highlighted the disparity of payment limits between counties.
For example, a couple, or single adult, with one child can receive up to €900 in County Cork but only €525 in Kerry.
“There’s such a disparity with our nearest neighbour Cork with thresholds and that does not make sense to me,” said Cllr Healy-Rae
“If you compare Killarney with Ballyvourney, there’s obviously a greater demand in Killarney and the rents would be higher.”
However, Cllr Healy-Rae stressed that Killarney’s greater housing issue lies in the lack of available housing.
While social housing has been built in the area, with developments such as Cronin’s Wood currently underway, no affordable housing schemes have been completed in the county.
“The problem really is that people can’t find anywhere to live,” said Cllr Healy-Rae.
What’s available is so little. It’s all great if they get approved for HAP, but the real challenge is actually to find somewhere available.”
“It’s a desperate situation, particularly for families. Telling them ‘if you can’t find somewhere, maybe you’ll get homeless accommodation in Tralee, maybe Killarney’ – there’s very little there.
“If you’re moving someone like that to Tralee. They’re not near work, they’re not near the doctor, they’re not near school – it just doesn’t work. Raising the threshold is one issue but it’s the availability of properties is where I see the real challenge for people.”
Jonathan Greene, director at Property Partners Gallivan in Killarney, which is involved in HAP tenancies, said the firm hadn’t had a HAP application under the 100 per cent limit in the last 12 months.
“Anyone who is qualified for HAP is topping up the payment from looking at our books,” he said.
“The single people’s limits really need to be changed because a one bed apartment could be ranging from €800 to €1,000 per month, and for single people their HAP payments are down at €380 per month.”
“I think the real issue is for single people, and then single people who are middle-aged and perhaps working part time. I find that’s the hardest situation.”
Mr Greene also highlighted the developing situation in the rental market as new regulations are set to come into force next year.
From March 1, rental agreements will at minimum be six-year tenancies and landlords will be unable to put their properties on the market without tenants being left in situ. Rents will also not be allowed to increase more than two per cent annual.
Many smaller landlords are now seeing the market conditions as unviable and are selling out of the industry altogether, with high property prices encouraging the exodus.
Furthermore, when new rental properties come on the market for the first time, their initial asking rent is not constrained by caps, and thus Mr Greene says a “two-tier” system is developing.
On the one hand, there are properties with suppressed rents, which are under pressure to sell out of the market, while on the other hand there are new rental properties appearing at massively hiked prices.
Killarney has been designated a rent pressure zone since April 2020, capping rent increases at two per cent per year and forcing prices to lag behind the rest of the county.
Mr Greene says his firm has seen a significant increase in rental terminations in the last few months, with many leaving the market altogether due to the approaching regulations.
“Since October till now there’s been an increase, and I would say 90 per cent of them are terminations based on landlord selling.”
“Its concerning because we have so little supply. You could have someone who’s coming out of a rental that’s been capped for 6 or 7 years, and they’re looking at a new rental property today, at market rent, and it’s crazy.”
“With the rent caps and the recent regulation, I feel they’ve created a two-tier system. You have tenancies now with five year of limited rent increases which has certainly canned the market, but anyone coming to the market with a new property is setting the rent high.”