More than half of all tenants are receiving State housing support so they can afford their home, new research shows.

Almost 300,000 households across the country were given help towards their housing costs in 2020, which is more than double the 1994 figure of almost 135,000 and amounts to 54% of those renting.

Worryingly, the level has "grown significantly", the Economic and Social Research Institute has reported.

It comes after a recent Daft.ie report found there were just 851 rental properties available across the country while an estimated 20,000 people are looking for accommodation.

More of the support was now provided indirectly through schemes such as the Housing Assistance Payment (HAP) according to Barra Roantree, one of the authors of the ESRI report.

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"While both direct and indirect supports greatly improve affordability for households, our finding that almost one in five supported renters are in the top half of the income distribution raises questions about how well targeted these supports are," he added.

Over the past three decades, there has been a shift away from the direct provision of support - through local authority- and approved housing body-owned accommodation - towards indirect subsidisation of housing costs in the private rental sector, with HAP, the Rental Accommodation Scheme and Rent Supplement assisting around one in three supported renters now compared to just one in five in the early 1990s.

According to the ESRI report: "There are questions about how well targeted these housing supports are. Many low-income renters receive no support for their housing costs and face high rent-to-income ratios, while almost one in five of supported renters are in the top half of the income distribution."

Mike Allen, of the homelessness charity Focus Ireland, said it was "extraordinary" that more than half of the private rental sector is "essentially used as social housing". He asked: "Where does this leave people whose income is just above the level where they get these supports?

"They're competing in a really, really tight market to afford rents and they're paying the full amount of the rent. But a person on a slightly lower income is receiving significant support and therefore is able to pay the rent.

"People whose income is not low enough to qualify for support but is too low to be able to afford rents "probably end up staying with their parents", he added.

ESRI estimates the share of households eligible to apply to their local authority for support with housing costs fell from 46.8% to 33.9% between 2011 and 2019, largely because of a freeze on most income limits. The €430-a-week limit for HAP covers a very small share of properties, particularly for single adults in cities.

Average rent across the state is €1,567 a month, up almost 12% in the past year.

In Dublin, only 6% of one-bedroom tenancies registered in 2020 came under the maximum rent allowed for single adults claiming HAP, while only seven out of 31 local authorities had at least 25% of one-bedroom tenancies below these limits.

"This is in part because rents for new tenancies increased by 24% between 2017 - when these rent limits were last revised - and 2020," the report states.

More than nine in ten supported renters have their rent contributions determined by their local authority's differential rent scheme, but these vary hugely in design across local authorities.

Report co-author Rachel Slaymaker noted: "Our report highlights the chronic undersupply of affordable rental accommodation in many areas, particularly for low-income single adults. Addressing this is likely to require sustained investment in and expansion of the public housing stock for rent, which will entail more than just increasing expenditure."