A NEW-look points-based system for calculating public sector housing rents will lead to an average increase of 11.8 per cent from April next year, MHKs were told.
And Social Care Minister Chris Robertshaw said the knock-on impact of this rent rise would be an estimated £900,000 maximum extra cost in benefits that will have to paid out to tenants.
A shake-up of local authority rents, including a revised points-based formula, was announced earlier this month by the Department of Social Care.
It will result, for example, in the rent for a new build three-bedroom property with a garden and off road parking being increased significantly by around £16 a week to £95 per week while an older two-bed flat (not recently refurbished) with no private garden or off road parking may get an inflation-only increase of 1.8 per cent, taking rent to £63 per week.
Replying to a House of Keys question from John Houghton (Douglas North), Mr Robertshaw said the revised formula, which comes into place from April, will provide an ‘equitable and transparent’ means of calculating the rent for a property to reflect the ‘true amenity value’ of the accommodation to those who live in the property.
He said that, as with every rent rise, both in the public and private sector rental market, there is a knock-on impact for the those claiming income-related benefits and who qualify for housing allowance.
The Minister said the impact on benefits would be determined by the type of property the claimant lives in. But based on the average increase being about 11.8 per cent across the public sector, the maximum increase in income related social security benefits was £900,000.
Mr Houghton said many homes on the Willaston estate in his constituency were in ‘dire need’ of refurbishment or replacement. ‘Would that attract a reduction in rent?’ he asked.
Mr Robetshas replied that new system, which replaced one that has operated since 1989, would reflect whether properties are older or in need of refurbishment.
Brenda Cannell (Douglas East) said pensioners and others on fixed incomes were still reeling from the 10 per cent increase in rents brought in last year. ‘This increase is likely to put many in an arrears situation,’ she said.
Mr Robertshaw said this was part of a rolling programme. ‘Last year we increased rent across the board by 10 per cent. This year we are trying to increase rents fairly and equitably.’
David Quirk (Onchan) asked whether there was an appeal process.
The Minister replied that the new system had been constructed with the support of the local authorities. He said that there was an opportunity in ‘exceptional circumstances’ to reduce the points by 10.
He said the modernised rent pointing formula took into account the significant advances made in building design, improved construction standards and modern amenities, rather than relying on a basic measure of room sizes and facilities such as central heating, double glazing which he said is now seen as standard in modern homes.
Peter Karran (Lib Van, Onchan) accused the Minister of targeting one section of the community.
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