A Government report has recommended increasing payments to landlords who are renting out their properties under the State’s rental accommodation scheme (RAS).
The report, which was published last month, also recommends the introduction of “finder fees” for new private tenancies entering the scheme.
The fee would be contingent on a property being signed up to a new multiyear RAS contract while the report does not indicate an amount.
The rental accommodation scheme is run by local authorities and is available to those who are availing of rent supplement for a long period of time and are in need of long-term housing.
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Local authorities draw up contracts with landlords to provide such housing, and pay the rent directly to them which includes contributions from the tenant.
The report notes that private landlords are paid 92 per cent of the market rate under the scheme, though local authorities have discretion to pay in excess of this “should circumstances warrant it”.
“In our consultation process there was broad consensus that the level of rent payable to private landlords is a major driver in landlords leaving the RAS scheme,” it says.
“An increase in the rent payable may assist in maximising the number of units available for RAS.”
The number of landlords leaving the scheme is “again on the increase” following the Covid-19 pandemic, the report says, with a 22 per cent rise in exits between 2020 (824 exits) and 2023 (1,004 exits).
There was a 37 per cent decrease in the number of new entrant landlords to the scheme between 2020 and 2023.
It adds that figures for quarter one of 2024 suggest this pattern of “high levels of landlord exits with low levels of landlord entrants” is continuing.
The report also states that the Department of Housing is aware there are numerous RAS landlords caught in a type of “rent pressure zone trap”.
It says there were a number of landlords who were not up to date in seeking their rent reviews when rent pressure zones (RPZs) were introduced and are now “caught in a situation where they are receiving well below the equivalent of the 92 per cent of market rent that they can receive under RAS”.
“Some local authorities are reporting this as a reason that landlords have been leaving the scheme,” it says.
The Government report, entitled A Review of the Future of the Rental Accommodation Scheme, was prepared by the Department of Housing, Local Government and Heritage.
It comes as Taoiseach Micheál Martin signalled changes to RPZs, including their possible removal, in recent days.
Mr Martin said on Sunday that the Government would explore an alternative to RPZs between now and the end of the year when they are due to expire.
He said the Government was looking at changes to the way the rent cap system is structured.
“We’ve got time because the rent pressure zones expire at the end of the year,” he said.
“We have time to see if we can develop an alternative system which protects renters but also enables people to have a clear, stable environment in which to invest.”
Minister for Public Expenditure Jack Chambers later said that the review of rent pressure zones was under way and had no “predetermined outcome”.
On Wednesday, Tánaiste and Fine Gael leader Simon Harris indicated personal support for the retention of rent pressure zones, saying the Government should not “make policy on the hoof”.
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