Helping more people to pay more rent

The Housing Authority recently announced substantial increases in its rent subsidy scheme. From our own research this was necessary even though official statistics and reports are hiding the fact that private lets are booming, and that private lets have increased substantially over the past five years.

We found that as our rent contributions were low they were mainly assisting older people (who tend to be paying lower rents) and that younger families with children tend to be having serious affordability problems.

Families have essentially been divided into three for the purposes of this scheme. The first group are single persons. The second are families of two adults. The third group are families with children.

The increases are about 33 per cent higher than they were in the previous scheme, with the maximum amount for a single person being Lm320 per year, for two adults, Lm400 per year and for families with children up to Lm415 with an additional Lm50 for larger families as well as an additional Lm50 where there is a disabled member in the household.

The situation in the private rental sector among the post 1995 rents is worrying though. It appears that landlords are not declaring rental income, which makes it more difficult for tenants to get help, and clearly there are no controls, so rent levels do not always reflect the quality and size of the property.

I would like to see tax changes which would have a lower flat rate to encourage more landlords to rent and also to declare, so that we can eventually move towards more equity in the new rental sector.

Obviously there are all the historical problems of the old residential lets, where landlords are justifiably anxious about having properties where a pittance is being paid in rent, they are still responsible for repairs and the grossly unfair right of inheritance means even the landlords' own children or even grandchildren cannot ever benefit from this equity.

Our own research shows quite a boom in new rents, despite official figures indicating otherwise. Not least the fact that a mere 37 applied in 1999 and 120 applied last year (932 valid applications to date) and this figure is clearly set to rise substantially, as more and more separations and the rise in property prices encourage more people into the rental sector.

We also currently have a campaign of publicity slots before the 8 o'clock news on PBS to encourage more awareness about this scheme.

We do however now have some information about who our typical applicants are.

Age

Although the age range is large (with the youngest applicant being 20 an the oldest 67) the largest group of applicants are in the 20-39 age range. These represent over 55 per cent of all applications.

Status

As far as families with children are concerned the data on status speaks for itself. The majority of applicants are separated. The second largest group are the single parents who represent 41.7 per cent of all applications (47.1 per cent).

Around 20.7 per cent are married. Again, the gender of the applicants tells another tale with the vast majority of those heading these households being female.

In fact, 98 per cent of applicants who have children and apply for this scheme are headed by female headed households, which clearly shows that it is overwhelmingly women who are taking the responsibility for children in cases of marriage breakdowns or when the parents have not married.

Locality

The locality with the greatest number of applicants is St Paul's Bay, followed by Marsascala and Mosta. Basically, the largest number of applicants come from central Malta.

Rent paid

The average amount being paid by families with children was Lm734 per annum. When we then match this to the income of applicants these rent levels are clearly impossible. So a number of things must be happening.

Applicants are hiding other sources of income. They may be being helped by family members or live-in or out partners to pay the rent, as these rent levels could not be paid even with the help of our scheme on the low levels of income declared. In fact, the average income declared (a gross figure) is Lm2,210.33 and clearly paying a third of this in rent when your income is so low is untenable.

The changes in the scheme will go some way to providing much needed help in this area. But it's very hard to target help accurately when we as a nation are still not declaring our income, and this applies just as much to tenants as to landlords of post 1995 rents.

Hopefully, data from the new census might help us target taxpayers' money even more accurately at those who really need it and to those who work hard to help themselves as much as they can.