Public Sector Rent Increase Announced
The Minister for Infrastructure, Mr Ray Harmer MHK, today announced that the Council of Ministers has approved a public sector rents rise of 3.1% with effect from 1 April 2018.
Onchan District Commissioners indicated that they recommended a 0% increase for 2018/19.
The effect of a 3.1% rise will result in an average rent increase of £2.96 a week for a three-bedroom house.
Full press statement from the Department of Infrastructure can be found at : Public Sector Rent Increase.
Onchan District Commissioners were consulted and the minute of their discussion on the subject is below:-
"1. Department of Infrastructure – Rent Increase 2018/19
Correspondence received from the Direct of Housing dated 6th September 2017 regarding rent increase 2017/18 and the Allowances available from rental income.
(a) Rent Increase
The Commissioners unanimously agreed that there should be no rent increase for their social housing. They believed that the tenants have had minimal pay rises in the last 12 months and had suffered financial hardship.
Members requested that a press release should be issued stating why the Board of Commissioners recommend a 0% increase. The Board felt that they had consistently maintained their stance of 0% increase over the last five years.
The Deputy Clerk's report dated 20th October 2017, having previously been circulated was considered.
In terms of general housing stock, the management allowance stipulated by the Department of Infrastructure is 5.5% of rents receivable. The median for running EPC in the United Kingdom (UK) is £5,200 per unit, and this Authority are only receiving approximately £3,000 in rent and are having to make any shortfall up from general housing rent.
UK providers are receiving £1,300 per unit for administration costs, and £1,780 per unit for maintenance and renewals. This Authority does not receive that amount in allowances, it could be argued that the costs of labour and materials is higher on the Island than it would be in the UK.
The financial shortfalls if the UK allowance is applied to Onchan stock are £562,741 for administration and £359,071 for maintenance.
Members agreed that the allowances are a separate issue to the rents. They felt that it was clear that the allowances needed increasing to cover expenditure and running costs.
Members requested that the Deputy Clerk write to the Department of Infrastructure stating that having reviewed the allowances they believed they were inaccurate and should be more in line with the UK counterparts.
Members also requested that a press release be issued."