A rent freeze next year is ‘unrealistic’ says DoI

The Department of Infrastructure has warned housing providers that freezing public sector rents next year is ‘unrealistic’.

It’s due to the need for ongoing investment in social housing, and the cost of providing the service, which is subsidised by the DoI.

The department has started the annual rent setting consultation with local authorities, to find out what they consider to be an ‘appropriate rise’ for 2021.

In April this year, tenants saw a below-inflationary increase of 2.1 per cent.

Housing providers are subsidised by government via an estimated £6 million in ‘deficiency payments’, used to plug the gap in rental income and costs.

Local authorities use a portion of their rent to operate housing, with the rest used to fund investment in capital projects.

Housing member in the Department of Infrastructure, Julie Edge, says she wants to see a periodic rent setting policy introduced.

Ms Edge wants to ensure rent levels are fixed to provide transparency for stakeholders, and allow for better planning, whilst insulating the decision from short term political interference.

Despite her wishes, the department will not introduce fixed rent setting yet, as not all providers agreed with the concept when asked earlier this year.

Onchan Commissioners have consistently voted that rents be frozen, to shield tenants from ‘unfair increases’, but this year, they’re reluctantly recommending a 2% rise.