[PR] New rent supplement limits outlined following rent limit review

RollYerOwn

gurramok wrote: »

You have to remember that Irish rents to make them affordable are based on people sharing.

(example) She will be entitled to way less than 500 quid as she has savings hence no accommodation unless she seeks sharing and thats a fight as her savings militate against her entitlements.

To avoid the above scenario, the only solution is to buy a gaff somewhere before she loses her job. In that way she will not be penalised for having savings(they were sunk into property) and she will be entitled to Mortgage Interest Relief and still retain her place of residence for at least a year. Thats based on a recent buyer where mortgages can be up to half the expenditure per month in comparison to renting.

No-one is going to argue that a single person should be maintained in an apartment, and I don't think that's too different the world over. If you used a couple as an example, then I would agree.

Regarding savings.. if you have savings that preclude you from getting the benefits you might otherwise get, then you should be using your savings, not the welfare system, to pay your rent. You shouldn't be able to have a stash-o-cash and still claim the need for assistance.

I suppose it depends on your perception - there are those that look to take advantage of the system whether they have money or not, whilst the system is supposed to provide for those that need the help. In your example, if the person buys a property to invest their limited wealth and take advantage of the welfare system, and then finds they can't make their minimum payments after the mortgage interest runs out, then no-one is going to have much sympathy are they?

gurramok

RollYerOwn wrote: »

No-one is going to argue that a single person should be maintained in an apartment, and I don't think that's too different the world over. If you used a couple as an example, then I would agree.

Regarding savings.. if you have savings that preclude you from getting the benefits you might otherwise get, then you should be using your savings, not the welfare system, to pay your rent. You shouldn't be able to have a stash-o-cash and still claim the need for assistance.

I suppose it depends on your perception - there are those that look to take advantage of the system whether they have money or not, whilst the system is supposed to provide for those that need the help. In your example, if the person buys a property to invest their limited wealth and take advantage of the welfare system, and then finds they can't make their minimum payments after the mortgage interest runs out, then no-one is going to have much sympathy are they?

I know it would be limited but that person is not investing but merely providing a roof over their heads using their own means. But can't you see how the welfare system encourages no savings?

That person if they spent every cent would be entitled to hell of alot more without savings and also if they had kids(more the merrier), the system accommodates. It encourages dependency on the welfare state.

RollYerOwn

gurramok wrote: »

I know it would be limited but that person is not investing but merely providing a roof over their heads using their own means. But can't you see how the welfare system encourages no savings?

That person if they spent every cent would be entitled to hell of alot more without savings and also if they had kids(more the merrier), the system accommodates. It encourages dependency on the welfare state.

Yes you make the point many people make, and usually from the perspective of "the haves". From this perspective, in theory, the welfare system supports "the have nots" to an extent where they will never try to be one of "the haves" themselves.

Take your example. The "have" in this case is unwilling to part with their savings once their income has dried up. Instead they feel it is unfair that they should have to spend their own money supporting themselves when "the have nots" are not having to do so - these "have nots" are in the enviable position of being supported by the State. So what does the "have" do?
Well a choice of two things I can think of...

1) spend all their money toute de suite so that they can quickly join their compatriot "have nots" in that glorious position of state sponsored existence.

2) look for help to get out of their own crisis which comprises living in fear of losing their little bundle and slowly relegating themselves to the position of "have not" themselves

I'm going to give the benefit of the doubt and presume that the many vehement posters on this site who would do away with the safety net allowances and subsidies have at one time or another been in receipt of those same allowances and are therefore commenting from some point of experience. I wonder, if life was so good when they were in receipt of these allowances - why did they ever bother getting a job again?

The alternative is that these posters have never been unfortunate enough to be in the position of no money and no job. In which case they could be said to be talking out of the wrong part of their body. I say again, try it first.

gurramok

They are not trying to get rid of RS, they want it reduced and it rightly should be as its costing too much for both RS tenant and the working tenants. At it present high level, its a subsidy to landlords living the high life.

The haves as you put them worked very hard for that bundle as you call it, they should be entitled to some assistance when things go wrong instead of zero assistance as presently.

What you seem to accept is that lets say that worker who saved up 50k for a deposit for a house and presently rents at 1000 per month, should use that to pay their rent until it runs out.
When it runs out how will they afford accommodation? They will get nothing in RS and only be entitled to Jobseekers Assistance for food.

RollYerOwn

gurramok wrote: »

They are not trying to get rid of RS, they want it reduced and it rightly should be as its costing too much for both RS tenant and the working tenants. At it present high level, its a subsidy to landlords living the high life.

Given that most of the advertisements on DAFT etc specify "No Rent Allowance", how do you maintain that rent are kept high by tenants who are claiming RS? Surely it is all the working tenants who are paying those prices who are keeping them high - just as it was prior to the recession. Rents were uniformly high with a bit of a hike in Dublin - now rents are uniformly dropping with the exception of Dublin (because people still move there to work). Until people can find other areas that are more affordable to live in (instead of flocking to preferential areas of Dublin) rents will remain high there.

gurramok wrote: »

The haves as you put them worked very hard for that bundle as you call it, they should be entitled to some assistance when things go wrong instead of zero assistance as presently.

Do you assume that the "have nots" did not work very hard because they don't have a bundle? If you don't assume this then "working very hard" is just an emotional spin that is irrelevant. If you believe that working hard makes you rich, you are very naive. Plenty of people worked very hard and still have nothing.

And no, you shouldn't be entitled to some assistance if you have 50k in the bank. That's 3 years minimum wages for hundreds of thousands of tax payers.

gurramok wrote: »

What you seem to accept is that lets say that worker who saved up 50k for a deposit for a house and presently rents at 1000 per month, should use that to pay their rent until it runs out.
When it runs out how will they afford accommodation? They will get nothing in RS and only be entitled to Jobseekers Assistance for food.

When their 50k runs out, they do what other people (who cannot afford to save 50k) do to pay their rent - they use their wages instead of saving up 50k.

What do you mean they will get nothing? Once there savings diminish to something reasonable like 5k (which is ignored completely) they become eligible for welfare benefits based on the fact that they don't have that big bundle. THEY BECOME ENTITLED TO ASSISTANCE! Why? Because they need it, whereas they didn't need assistance before.

It really strikes me that you believe that someone on the dole might be getting one over you if you don't get what they get. This is absurd.

RollYerOwn

gurramok wrote: »

What you seem to accept is that lets say that worker who saved up 50k for a deposit for a house and presently rents at 1000 per month, should use that to pay their rent until it runs out.
When it runs out how will they afford accommodation? They will get nothing in RS and only be entitled to Jobseekers Assistance for food.

By the way, if that person is single and rents at €1000 per month, they are still entitled to nothing. The maximum rent they can pay before becoming entitled to RS in Dublin is €529. They will do what everyone else has to do and share.

gurramok

RollYerOwn wrote: »

Given that most of the advertisements on DAFT etc specify "No Rent Allowance", how do you maintain that rent are kept high by tenants who are claiming RS? Surely it is all the working tenants who are paying those prices who are keeping them high - just as it was prior to the recession. Rents were uniformly high with a bit of a hike in Dublin - now rents are uniformly dropping with the exception of Dublin (because people still move there to work). Until people can find other areas that are more affordable to live in (instead of flocking to preferential areas of Dublin) rents will remain high there.

Do you assume that the "have nots" did not work very hard because they don't have a bundle? If you don't assume this then "working very hard" is just an emotional spin that is irrelevant. If you believe that working hard makes you rich, you are very naive. Plenty of people worked very hard and still have nothing.

And no, you shouldn't be entitled to some assistance if you have 50k in the bank. That's 3 years minimum wages for hundreds of thousands of tax payers.

In case you did not hear, the govt controls 50% of the Rental market. That is half of all private rental accommodation tenants get RS. The minimum in Dublin for RS from memory is about 900 quid for a couple/single mother with a kid. Thats what keeping the rental market high in most areas of the city.

You see, those have nots that were haves became have nots because the system says they must spend their savings on accommodation before they are entitled to anything.

Those have nots who worked hard to have money as savings lose it all and are treated the same on financial qualification as spongers. Thats grossly unfair. It encourages the whats the point of working of a living mentality.

RollYerOwn wrote: »

When their 50k runs out, they do what other people (who cannot afford to save 50k) do to pay their rent - they use their wages instead of saving up 50k.

What do you mean they will get nothing? Once there savings diminish to something reasonable like 5k (which is ignored completely) they become eligible for welfare benefits based on the fact that they don't have that big bundle. THEY BECOME ENTITLED TO ASSISTANCE! Why? Because they need it, whereas they didn't need assistance before.

By the way, if that person is single and rents at €1000 per month, they are still entitled to nothing. The maximum rent they can pay before becoming entitled to RS in Dublin is €529. They will do what everyone else has to do and share.

They get no rental assist as the level of entitlement is way too low. Your escape route for them is to share into cheap dodgy accommodation. Thats why the system encourages housebuying over renting as there is more security of tenure in buying.

Its means tested if they share or not, hence they will get hardly anything for rent.

RollYerOwn

gurramok wrote: »

In case you did not hear, the govt controls 50% of the Rental market. That is half of all private rental accommodation tenants get RS.

No i did not hear that. But prior to those people claiming RS (when most of them were working), what was the reason for high rents in Dublin then? Look outside of Dublin to towns where there is less work, more unemployment, and the rents have fallen off dramatically.

gurramok wrote: »

The minimum in Dublin for RS from memory is about 900 quid for a couple/single mother with a kid. Thats what keeping the rental market high in most areas of the city.

No. The MAXIMUM rent a single mother and child can pay and still be entitled to RS is €930. That means if her rent is higher she gets nothing and has to move to somewhere cheaper - so rents higher than this can't be blamed on single mothers claiming RS.

gurramok wrote: »

You see, those have nots that were haves became have nots because the system says they must spend their savings on accommodation before they are entitled to anything.

You have to spend money to live, and if you aren't earning money then you have to dip into your reserves until you start to earn money again. What you do with your money is up to you. No-one is going to give you free money when you have lots yourself.

gurramok wrote: »

Those have nots who worked hard to have money as savings lose it all and are treated the same on financial qualification as spongers. Thats grossly unfair. It encourages the whats the point of working of a living mentality.

I don't really follow you. If you have enough money to live and you are looking for more money, then you are the definition of a sponger.

gurramok wrote: »

They get no rental assist as the level of entitlement is way too low.

You mean they live in an expensive apartment or house whilst single mothers and other people on RS have to live in crap small places below the "entitlement" threshold..

gurramok wrote: »

Your escape route for them is to share into cheap dodgy accommodation.

Its not an escape route - its what people on RS have to do precisely BECAUSE rents are still too high and the threshold so low. Reducing their weekly RS payment isn't going to change that.

gurramok wrote: »

Thats why the system encourages housebuying over renting as there is more security of tenure in buying.

I think if anything it has proved to be the reverse. There has been no security in buying because of the over inflation caused by people's desire to buy at any cost. It just took Irish people a long time to see it. Its happened elsewhere lots of times and its nothing new.

Regardless, the person with 50k in their pocket, losing their job and looking for handouts needs to realise that they have opportunities beyond renting in Dublin, and needs to take them. It's just a hangover from the last 10 years that people think they can continue to lead the lifestyle they had become accustomed to.

gurramok

RollYerOwn wrote: »

No i did not hear that. But prior to those people claiming RS (when most of them were working), what was the reason for high rents in Dublin then?

Genuine rental shortage, high house prices making it unaffordable to buy and strong immigration post 2004.

RollYerOwn wrote: »

No. The MAXIMUM rent a single mother and child can pay and still be entitled to RS is €930. That means if her rent is higher she gets nothing and has to move to somewhere cheaper - so rents higher than this can't be blamed on single mothers claiming RS.

Nope, you have taking it up wrong. The RS is an artificial floor on rents in this country.
If the govt tomorrow decided to slash that 930 amount to 530, do you think tthe landords are going to do a mass eviction?:rolleyes:

They won't as they will try to get the best rent they can get in a oversupplied rental market as most LL's have mortgages to service and any money they can get through rent is accepted.

RollYerOwn wrote: »

You mean they live in an expensive apartment or house whilst single mothers and other people on RS have to live in crap small places below the "entitlement" threshold..[/quote[

They are certainly not where I am. A 19yr old single mother just moved into a 2bed last month. She got the maximum amount soley because she had a kid and obviously no other means of income.

RollYerOwn wrote: »

I think if anything it has proved to be the reverse. There has been no security in buying because of the over inflation caused by people's desire to buy at any cost. It just took Irish people a long time to see it. Its happened elsewhere lots of times and its nothing new.

There is more financial support for buying than renting in this country. From Mortgage Interest Relief and lower mortgage costs(rates low for last 2 years) to Mortgage Interest Supplement when things go wrong along with a 1yr moratorium on evictions, buying is a plus.

With renting, if you don't stump up your rent per month, you are a prime candidate for eviction and the tight rules for RS for a worker makes it even harder to get welfare support. Throw in prejudice by alot of LL's against RS seekers and its quite a different support base than buying.

RollYerOwn wrote: »

Regardless, the person with 50k in their pocket, losing their job and looking for handouts needs to realise that they have opportunities beyond renting in Dublin, and needs to take them. It's just a hangover from the last 10 years that people think they can continue to lead the lifestyle they had become accustomed to.

We'd have to agree to disagree on this issue.

gurramok

Here's the link for where the govt control 50% of the rental market.
http://www.welfare.ie/EN/Press/PressReleases/2010/Pages/pr100610.aspx

Irish govt wrote:

“The Department of Social Protection funds approximately 50% of the private rented accommodation in the country and with that level of influence on rents, it is essential that the maximum rent limits for rent supplement reflect real prices so that landlords are charging a fair rent and the State pays a fair price,” Minister Ó Cuív stated today (10th June 2010).

“Our priority is to ensure that the 95,000 households supported by rent supplement can secure quality accommodation at a fair rent and that landlords are not charging artificially high rents. Reducing the rent supplement rent limits to reflect real prices will assist us to do that and will promote a fair rent.

RollYerOwn

gurramok wrote: »

Nope, you have taking it up wrong. The RS is an artificial floor on rents in this country.
If the govt tomorrow decided to slash that 930 amount to 530, do you think tthe landords are going to do a mass eviction?:rolleyes:

They won't as they will try to get the best rent they can get in a oversupplied rental market as most LL's have mortgages to service and any money they can get through rent is accepted.

No, they'll try to get as much as they can and will insist at the very least on covering the mortgage. As soon as it becomes unprofitable or an expense to them, they'll kick the tenants out for breaking the lease. What's more no-one will blame them, they'll blame the govt for removing the rental supplement that was providing rent for people who could otherwise not afford to pay the landlord. What's more, the govt will certainly not reduce rent supplement by something that drastic. I'm afraid the impoverished in this country won't go away. The rich might, and those who can find opportunities abroad, but the single mothers, the disabled and those who have other reasons to stay and can't find work will remain, and they'll have to be cared for.

The only feasible option in this regard IMO is for the government to take possession of property and become the landlords they should have been. People in receipt of (at least long term) Rent Allowance shouldn't be paying rent to a private landlord, they should be accommodated cheaply by the state without profit. Rent supplement is not designed for this, its a short term subsidy for people who can't afford rent, until their situations changes. Its hardly surprising that the welfare system wasn't expecting 15% of the country to be made unemployed in a space of two years. Now RS doesn't seem so different from RA, and the govt need to do something about it.

gurramok wrote: »

They are certainly not where I am. A 19yr old single mother just moved into a 2bed last month. She got the maximum amount soley because she had a kid and obviously no other means of income.

Not sure I follow what the issue is here.. What exactly in her case would the option be? Would you have preferred her to have been bundled into a 1 bed with her child? Are rents for 2 bed appts where you live much cheaper than that then or soemthing?

gurramok wrote: »

There is more financial support for buying than renting in this country. From Mortgage Interest Relief and lower mortgage costs(rates low for last 2 years) to Mortgage Interest Supplement when things go wrong along with a 1yr moratorium on evictions, buying is a plus.

Don't think you're looking at the long term here - which was the problem we saw in the last few years. Interest rates only have one direction to go, up, as banks are going to be trying to claw back their losses. House prices have been overvalued for over 10 years, not just the last 5, and also have only one direction to go, down. Neither of these things would be encouraging for a potential buyer right now.

Mortgage interest relief is limited in its duration, and we have a long term unemployment problem.

gurramok wrote: »

With renting, if you don't stump up your rent per month, you are a prime candidate for eviction and the tight rules for RS for a worker makes it even harder to get welfare support. Throw in prejudice by alot of LL's against RS seekers and its quite a different support base than buying.

Certainly I agree that there is an immediate advantage in terms of not facing immediate repossession (compared to getting kicked out of your rented accommodation), but I think this is far outweighed by the long term risk of being in debt to a tune of anything up to a hundred grand or more, with no assets, no job AND homeless.

Sure if some people want to take that risk they must be pretty sure of their employment potential. At the end of the day that's what it all comes down to - jobs. The rest of this is just arguing about the symptoms of a very sick economy, not the causes.

RS is an easy target for the govt and I've no doubts that they will reduce it by a margin. They won't be able to reduce it by much more than a margin or they will have tenants on the street or illegally occupying and landlords with mortgages they can't pay.

I don't believe that reducing RS by a margin in itself will drop rents, especially not in Dublin where people are still going to live and move to to find work. I do think that reducing all expenditure is an inevitability, including pay cuts, because the tax payers aren't numerous enough to pay the public service bill and the welfare bill. They need to trim this and trim that, but trimming isn't working and we better hope to god they find ways to create employment and get some money coming into the country, or there'll be nothing left to trim and the only way to cover the expenses will be severe tax hikes.

In the meantime, if you have a job and can manage your debts, you are in a fortunate position. If you owe no money, you are in a flexible position. If you have money and don't owe money, you are in the best position possible situation as flexibility and money provide options.

gurramok wrote: »

We'd have to agree to disagree on this issue.

I beg to differ....

The_Conductor

RollYerOwn wrote: »

No, they'll try to get as much as they can and will insist at the very least on covering the mortgage. As soon as it becomes unprofitable or an expense to them, they'll kick the tenants out for breaking the lease. What's more no-one will blame them, they'll blame the govt for removing the rental supplement that was providing rent for people who could otherwise not afford to pay the landlord. What's more, the govt will certainly not reduce rent supplement by something that drastic. I'm afraid the impoverished in this country won't go away. The rich might, and those who can find opportunities abroad, but the single mothers, the disabled and those who have other reasons to stay and can't find work will remain, and they'll have to be cared for.

Any landlords who purchased property in the past 10 years for the purpose of buy-to-let, have precisely zero chance of covering their mortgage from rental income once interest rates return to normal levels (which is about 1% above their current level for variable mortgages, and in keeping with a constant spread over the ECB fixed term lending rate (as opposed to their overnight rate- which trackers are shadowing).

It used to be the case that mortgage interest in its entirety was an allowable expense for landlords- this was reduced to 75% with the intention to phase it out completely (along with TRS for owner occupiers by 2016).

Its far more preferable to have tenants in a property- even if they are not covering costs- than it is to have the property vacant. Many landlords were perfectly happy to leave property vacant during the boom times- on the basis that property price inflation more than justified the cost of the capital they had tied up in the property. Those days are long gone.......

It is not the rich who are leaving the country by the way- its the youth- those who have minimal ties to the country- no property noose, no children, no dependents. They are the ones who are already leaving in their tens of thousands- the youth in whom we have invested vast amounts of money to educate them to a high standard. Once again- Ireland's biggest and best export are its people......... These days of the 50s/60s/70s/80s- are back with us again- are back with a vengeance.

Its fine to say- the old, the infirm, the disabled- are those who are going to stay here- and indeed they are. While they will have to be cared for- everyone has to accept that their standards of living- both those who are receiving social welfare assistance and also those gainfully employed- everyone's standard of living is going to fall significantly.

We are borrowing 23 billion this year to fund the everyday running costs of the country- the largest of which are social welfare, health and education. The current proposals are to chop another 3 billion from the budget in December- and increase taxation by a further 2 billion- narrowing the deficit by 5 billion- but meaning we would still need to borrow around 17.8 billion in 2011.

We are the second biggest basket case in the Eurozone (after Greece)- and it looks like we may have to pay up to 6% to borrow 4 year funds when we next go to the financial markets (next Tuesday). This is just under 3.5% more than the likes of Germany has to pay for comparable borrowing bonds.

We cannot simply borrow more money to dole it out (if you'll excuse the pun) to the old, the infirm, the disabled etc. International markets are not willing to lend us the money- and its not possible to increase taxation in a manner that will make up the shortfall (as it stands- a family of 3 are better off on social welfare than in a single income household on a gross salary of 60k- which is quite frankly a ludicrous situation).

The government is going to cut programmes- including Rent Allowance- significantly. People are going to howl. Everyone is going to hurt. Its unfortunate- but at this point there is a terrible inevitability to it all.

RollYerOwn wrote: »

The only feasible option in this regard IMO is for the government to take possession of property and become the landlords they should have been. People in receipt of (at least long term) Rent Allowance shouldn't be paying rent to a private landlord, they should be accommodated cheaply by the state without profit. Rent supplement is not designed for this, its a short term subsidy for people who can't afford rent, until their situations changes. Its hardly surprising that the welfare system wasn't expecting 15% of the country to be made unemployed in a space of two years. Now RS doesn't seem so different from RA, and the govt need to do something about it.

The government were landlords of vast numbers of residential properties previously- remember all the council estates built in the 60s and 70s? People insisted on having the right to buy out 'their' homes at significant discounts to open market values- to take into account the rent they had paid. That the rent was insufficient to cover ongoing repairs to the properties, was wholly ignored. At least the properties were well constructed, and in the main reasonably desireable residences. The only way the government could step in and become a major landlord again- would be by taking all those half built estates and apartment developments around the country and compelling people to live in them. The big issue with the bulk of these developments- is they are in locations that the vast bulk of people in need of housing assistance- do not want to live in.

Its all well and good to go on about RS and RA- the bigger picture is a threadbare kitty- there simply is no money there- and our borrowing capacity is rapidly dwindling.

RollYerOwn wrote: »

Don't think you're looking at the long term here - which was the problem we saw in the last few years. Interest rates only have one direction to go, up, as banks are going to be trying to claw back their losses. House prices have been overvalued for over 10 years, not just the last 5, and also have only one direction to go, down. Neither of these things would be encouraging for a potential buyer right now.

Its not even that interest rates are going up- so banks can claw back their loses. Irish banks have had interest rates over 1.4% below international norms for over 2 years. They were strong armed by the politicians into keeping their rates low (its partially why RBS have exited the Irish market). The business plans submitted to the Commission by the banks include an undertaking that they will operate as going concerns without distortionary market practices. This means- they need to be profitable enterprises, and need to recoup the cost of money they borrow from the folk they lend it out to. Its pretty elemental market economics......

So- totally aside from ECB rates going up- which they are indeed going to- Irish rates have significant upside attached to them......

With respect of property prices- lets say there are 200,000 vacant properties nationwide (according to the ESRI there are- I'm not sure that I believe them- but its a significant number regardless). The old argument was that we needed 40k new residences per annum to house our bulging population. We actually had a net outward migration of 68,000 last year (the majority of whom were non-nationals seeking better circumstances elsewhere- but the fact of the matter is that significant numbers of Irish are emigrating again). We do not need 40k houses per annum- with a shrinking population- indeed- we don't need a stock of 200k vacant properties fullstop........ Something somewhere, has to give......

RollYerOwn wrote: »

Mortgage interest relief is limited in its duration, and we have a long term unemployment problem.

Mortgage relief is due to be abolished for all but first time buyers by 2016- and phased out for first time buyers altogether also- by 2020. Mortgage as a deductable expense for investors, has already been reduced to 75%, and is due to be progressly reduced to nil by 2016. Yes, we have a longterm unemployment problem- however solutions are rather thin on the ground- we have priced ourselves out of most traditional industries...... If we want to look at the financial sector- the only one recruiting is the Financial Regulator (60 graduates for 2010 and another 60 for 2011)- which really is telling....... Hueston, we got a problem........

RollYerOwn wrote: »

Certainly I agree that there is an immediate advantage in terms of not facing immediate repossession (compared to getting kicked out of your rented accommodation), but I think this is far outweighed by the long term risk of being in debt to a tune of anything up to a hundred grand or more, with no assets, no job AND homeless.

Its an issue. However the fact is that there is a debt there. How do you say to Mr. Jones next door- who didn't borrow to fund a lavish lifestyle, and kept a modest house and modest expenditure during the good times- that he now has to bail out the idiot next door who insisted on having an annual new car, multiple trips to their apartment on the Costa del Sol- and by god, they wouldnt be seen anywhere near Aldi or Lidl?

Life isn't fair- certainly its not- however at some stage people have to accept responsibility for their own actions- us Irish are great at looking for scapegoats- or coming up with creative excuses- the usual being trotted out- sure if Anglo Irish is getting bailed out, why shouldn't I? There are a startling number of folk out there- who are totally incapable of accepting that they have any responsibility for their own circumstances whatsoever..... Sure- it was easy to get cheap credit- but no-one forced it down anyone's throats?

RollYerOwn wrote: »

Sure if some people want to take that risk they must be pretty sure of their employment potential. At the end of the day that's what it all comes down to - jobs. The rest of this is just arguing about the symptoms of a very sick economy, not the causes.

We have an economy that is being propped up with borrowings- and supported by expenditure by those on social welfare........ If you wanted to do a Monty Python sketch- it would be quite apt. We don't have an economy- we have the goodwill of international investors who are willing to bankroll our state- however they are demanding more and more money to do so.

RollYerOwn wrote: »

RS is an easy target for the govt and I've no doubts that they will reduce it by a margin. They won't be able to reduce it by much more than a margin or they will have tenants on the street or illegally occupying and landlords with mortgages they can't pay.

You already have tenants on the streets, and significant numbers of landlords who are incapable of servicing their mortgages. Sure- a significant reduction in RS will greatly swell the numbers of each- however it would also infer a reduction in the cost of living (for those of us fortunate enough to have jobs) here- in turn making up a little more competitive than our EU compatriots.

We cannot devalue our currency to get out of this mess- we can inflate our way out however- and this is what we have commenced doing (real wages are still falling, and inflation is well and truly back in positive territory again).

It is against this inflationary background that we are going to be chopping pensions, the dole, RS, healthcare, education and just about every other element of government expenditure. We are all going to hurt- both those in work, and those out of it.......

RollYerOwn wrote: »

I don't believe that reducing RS by a margin in itself will drop rents, especially not in Dublin where people are still going to live and move to to find work. I do think that reducing all expenditure is an inevitability, including pay cuts, because the tax payers aren't numerous enough to pay the public service bill and the welfare bill. They need to trim this and trim that, but trimming isn't working and we better hope to god they find ways to create employment and get some money coming into the country, or there'll be nothing left to trim and the only way to cover the expenses will be severe tax hikes.

The fact of the matter is that previous reductions in RA and RS have quickly been followed by reductions in the open market rental prices for accommodation in areas in which it has occurred (you have different reductions in different council areas- but it is consistent).

We may not have particularly high headline tax rates- but this does not imply that we can afford tax hikes- on the contrary, Ireland is almost unique in its levels of indirect taxation in a European context. The proposed 13.5% social levy on all- in lieu of PRSI, the wage levy etc- isn't even being sold as a tax hike- its being sold as a manner of funding our social welfare bill. It really doesn't pay to work in Ireland anymore- by the time you've all your deductions made- alongside your extra levies on electricty (another 5%), gas and telecoms levy- hell, you'd be better off in a monastic community- growing your own food, and abondoning a cash based society altogether.......

I dont think most folk have copped just how bad things are.......

RollYerOwn wrote: »

In the meantime, if you have a job and can manage your debts, you are in a fortunate position. If you owe no money, you are in a flexible position. If you have money and don't owe money, you are in the best position possible situation as flexibility and money provide options.

If are young- without ties, and in a position to emigrate- you are in the best possible position........ The people left in the country to pick up the pieces, regardless of who they are, or what their financial situation is- are the ones who are in trouble.

The big difference between this recession- and Ireland in the 1980s- is while the country was bankrupt back then- on a personal level, people didn't have any debt. So- no-one had anything, but no-one owed anything, and we had a pretty level playing field. Now we have 2 generations of people up to their necks in personal debt- and expected to fund the recovery of the country- alongside a younger generation who probably will emigrate in their droves- and pensioners, who don't owe anything- haven't had their pensions cut, and are the only group of people being mollycoddled by the politicians (so far anyway).......

I really don't know what we're going to do- we need to totally redesign the country from the bottom up........

RollYerOwn

Yes. Agree with most you've said, nice happy thoughts to end a sunny weekend :rolleyes:


However I'm still not convinced by this...

smccarrick wrote: »

You already have tenants on the streets, and significant numbers of landlords who are incapable of servicing their mortgages. Sure- a significant reduction in RS will greatly swell the numbers of each- however it would also infer a reduction in the cost of living (for those of us fortunate enough to have jobs) here- in turn making up a little more competitive than our EU compatriots.

...

The fact of the matter is that previous reductions in RA and RS have quickly been followed by reductions in the open market rental prices for accommodation in areas in which it has occurred (you have different reductions in different council areas- but it is consistent).

I'd like to know where the specific correlation between reducing RS and lowering rents is. I'm presuming there's evidence for a specific time frame which can be divorced from effects such as increased unemployment, and a general deflationary period. I'm also presuming this must be separate from the general reductions in rent that were occurring prior to the reduction in RA/RS? Rents have been falling for 2 years!

You might argue that Dublin rents have fallen least - and that this is because of the lack of a reduction in RS there - but I would maintain that this is more to do with the relative demand for housing in Dublin compared with the rest of the country, from where people are having to leave to look for work (reducing demand for rental property around the country).

If you can make that correlation, then I still believe that there's only so far you can go with that model.

But sure, as you say it will be targeted and we'll see. I believe a significant reduction in RA/RS will result in an inordinate amount of homelessness, and little comparative difference in rent prices. The latter, I believe, are not propped up by RS/RA but by the huge investments prospective "landlords" decided to make by borrowing money for the "buy to let model". They owe too much, and the renter has to pay for their borrowings.

Perhaps falling house prices will at some point get to a level where foreign investors looking for a reasonable return might bail us out by becoming landlords. No-one here has the money to sort it out.

snubbleste

.. assistance with rental payments across the entire country cost the taxpayer €517,923,074 in 2009.
This represented a total of 87,802 assistance claims, equating to an average payment of €5,900 a year per claimant.
"It has cost the state a fortune and it's clearly a false rental market. People are being given the money to spend on rent, and they spend it on rent, and so landlords have not reacted to prevailing market conditions."

http://www.tribune.ie/news/article/2010/sep/05/rent-aid-bill-of-over-500m-propping-up-house-price/

RollYerOwn

"Landlords who once shunned rent allowance tenants are now welcoming them with open arms."

Just did a quick search on what I think is the nations biggest internet property finder, and used their advanced search to see how many of their total available properties were willing to accept rent allowance. Did this for five counties:

Dublin 13.4% (729 of 5445)
Galway 14.4% (141 of 975)
Cork 14.4% (320 of 2213)
Kilkenny 13.4% (39 of 290)
Waterford 12.2% (88 of 721)

Hardly seems to me confirm the writer's comments in that article. In fact I'm shocked at how close these figures are.

gurramok

Well, of those ads where if a LL can't get a non-social welfare tenant, he has no other choice but to take a RS tenant...that is if he needs the money.

517m euro of public money which controls 50% of the private rental market, all going into straight into the pockets of private landlords, shocking indeed.

Jim Power and that councillor have it bang on, he's just repeating what I said in this thread earlier..

Jim Power wrote:

"It has cost the state a fortune and it's clearly a false rental market. People are being given the money to spend on rent, and they spend it on rent, and so landlords have not reacted to prevailing market conditions.

some councillor wrote:

""It's still propping up house prices. There are places in Corduff where you could buy a council house for not far off €120,000 to €130,000 and yet I am surprised when people tell me they are getting €1,100 in rent supplement," he said.

"There is no relationship between the price of the house and what you pay in rent. It's distorting the whole housing market and putting a floor under the rental market."