A 7.5% increase in public sector rent is expected to see a £0.9 million increase in benefit expenditure.

That is according to Treasury Minister, Alex Allinson, who responded to a written question on the matter.

It comes as the Department of Infrastructure has announced it would be increasing rent by 7.5% across 6,200 properties in the island.

The DoI anticipates that the rise will generate an additional income of £500,424 in 2024/2025 for its 1,200 properties.

This, it says, is to account for an increase in routine maintenance costs as well as planned improvement projects. The rent increase will come into effect April 1 this year. In context, December’s inflation report showed that rent had increased by 11.9% on the year prior, in comparison to the 7.5%public sector increase, although there will be four months difference in the figures.

Tenants who have their rent met by the Isle of Man Government as part of their income-assessed Social Security benefits will automatically have their benefits reassessed to take account of the new rental costs.

Having been questioned on the matter in the House of Keys this week, Infrastructure Minister, Tim Crookall said that increases over the past ten years had been low, with an increase in costs being absorbed by the Department of Infrastructure.

In a separate written response, figures were provided for the average rent amounts for public sector properties.

Public sector rent has increased by 37% over the past ten years (from the financial year of 2014/2015 to 2024/2025). For instance, a two bed house has increased from £78.74 a week to £107.92 a week, a two bed flat has increased from £71.78 to £98.38 and a two bed maisonette has increased from £34.01 to £46.61.

But MHKs have voiced concerns over the impact the rise will have on householders.

Onchan MHK said in the House of Keys that amidst a cost of living crisis and given that the increase is higher than September’s Consumer Price Index of 5.7%, which is the usual benchmark, he asked whether it was fair. Mr Crookall said that he thought it was fair, and that the DoI needed to claw back its deficit.

He also said that when considering how much to increase public sector rent by, the DoI had considered anything from a 5.7% increase to a 33.5% increase. The higher 33.5% increase was to meet the gap in the housing deficiency for 2024/ 2025.