Public sector rent rises to be linked to inflation

Rent rises for tenants in public sector housing will be directly linked to inflation in a bid to make the annual hikes more transparent, the Manx government has said.

The Department of Infrastructure (DoI) said the new method of calculation would see rents for more than 6,200 public sector properties rise in line with the September Consumer Price Index (CPI) figure from April next year.

The change would also see housing authorities given the discretion to add another 1% on top if felt necessary.

It marks a move away from the current system, which saw rent rises decided by the DoI after taking representations from the island's 15 local authority housing boards.

The DoI said the changes would apply to tenants of its housing agencies and those in local authority homes after the previous rent calculator was deemed "not transparent enough".

A scenario where all landlords chose to impose the extra 1% rate every year is considered unlikely, a department spokesman said.

The change, which has been mooted since 2022, aims to modernise the rent-setting process by aligning annual increases with the island's economic conditions while improving financial predictability for landlords and tenants "on minimum or living wages", he continued.

A new safeguard clause has been added to the calculation, allowing the DoI to set a lower rent rate if inflation spikes and rent increases were deemed "untenable".

Housing Authorities would be required to notify both the DoI and tenants of their decision to impose any discretionary increases.

Tenants would receive formal notice of their new rent levels ahead of the 2026 financial year, the department spokesman added.

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