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Rents should fall after supports cut

Social Protection Minister Joan Burton is to reduce by €22m the €516m per year paid to landlords in rent supplement for tenants living on social welfare. This move has much to commend it. It will have beneficial effects well outside the concerns of those directly involved.

The social advantages of this particular benefit are questionable. Even if they are granted -- and ignoring for the moment any abuses engaged in by a minority -- one must also question the relatively large amount of money spent in this area.

The availability of the supplement has pushed up rents in the entire market, not just for properties inhabited by individuals or families on social welfare.

The subsidy is paid to less than 100,000 households, but the total number renting houses or apartments comes to 150,000. The cuts now will force a lowering of rents, and protests by landlords will not attract a wide audience.

Recent trends in the market appear quite strange and barely logical, and do not suggest a market functioning in a normal way.

Between 2005 and the end of 2011, the cost of the allowance rose from €369m to €516m. In the same period, the numbers claiming it increased from 60,000 to 96,000: understandable, in view of the economic crash. But rents actually fell by 19pc in 2009. They then recovered, but only by 4pc, in 2011.

The whole system evidently needs further and detailed scrutiny.