TENANTS living in public sector housing in the Isle of Man will be hit with a rent increase in April.
The Department of Social Care announced today (Friday) that its annual increase in rent will rise to 10 per cent.
It says the decision to up the rent to 10 per cent, when previously it has increased by five per cent, is "essential" in addressing the rising cost of public housing to the taxpayer.
The average rent rise works out at less than £7 per week for those living in a three bedroom property. For people who are in sheltered accommodation the rent increase will work out at £2.40 per week.
Households on income-related benefits – a quarter of the people in public sector housing – will be largely unaffected.
Despite an increase in rent the Department of Social Care says public sector housing will still be less than 40 per cent of the cost of the equivalent private sector housing in the Island.
Social Care Minister Chris Robertshaw MHK said: "Public sector housing is a vital part of the Island's housing stock - helping to provide thousands of families, older people and others in our community with affordable, high-quality homes. It is vital that this remains the case.
"However the costs to the taxpayer of the existing housing stock have risen rapidly in recent years and are forecast to continue to do so.
"This rent rise is an essential first step to address the issue of providing affordable housing at a sustainable cost.
"All of the evidence shows we must act now to ensure current and future generations can access the affordable housing they need at a cost to tenants and taxpayers that is both affordable and sustainable.
"For more than a decade government has rightly invested in improving the quality of public sector housing on the Island, investing over £250m over the last 10 years alone, such that the Island's public sector housing stock is now better than it has ever been.
"Unfortunately the cost of construction and maintenance of these homes far outweighs the income received from rents. The taxpayer continues to make up the shortfall which this year is approximately £7m."
Mr Robertshaw said he understood tenants would feel anxious about the increase but said his department and the Council of Ministers had considered all of the facts and options before taking the decision.
He continued: "I firmly believe this rise is essential although I acknowledge the financial implications for some tenants.
"It is important to note that approximately 25 per cent of public sector households are in receipt of income-related benefits and so will be unaffected as their benefits will rise in line with rents.
"The exception is those families on Family Income Supplement which covers 70 per cent of housing costs hence their rent increases will be less than £3 per week."
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