Annual Rent Setting Query for Social Housing

Summary

The request sought discussions regarding Local Authorities' ability to autonomously increase social housing rents beyond Departmental prescriptions over the last 12 months. The response disclosed a new policy effective April 2026 allowing providers to increase rents by an additional 1% without approval, alongside CPI-based minimum increases and historical consultation data.

Key Facts

• From April 2026, public sector housing rents will increase by a minimum of the preceding September's CPI figure.
• Local Authorities will have the discretion to increase rents by an additional 1% without Departmental approval starting April 2026.
• The Department retains the authority to intervene if rent rises are deemed unsustainable.
• A 2019 consultation revealed mixed opinions among Local Authorities, with several disagreeing with proposed policies.
• The deadline for declaring the planned rent increase for 2026/27 was set for 17th November 2025.

Data Disclosed

• CPI March 2.8%
• CPI April 2.3%
• CPI May 2.6%
• CPI September 2024 2.2%
• Annual increase 2.9%
• Rent point value 1.797 to 1.849
• Rent point value with uplift 1.867
• Administration allowance 7.0%
• Maintenance allowance 32.5%
• Community reserve 8.4%
• Date 27th October 2025
• Deadline 17th November 2025
• Stock numbers: Braddan 185, Douglas 2360, Ramsey 553, Onchan 508, Peel 357

Original Request

Please provide any and all discussion (emails/minutes of meetings/documents/letters etc) relating to the consideration of providing an option for Local Authorities to autonomously add an additional percentage increase to social housing rent from that proscribed by the Department. The time frame for this FOI search would be the last 12 months.

Data Tables (10)

Full Response Text

July 2025 Additional notes for P&S – Rental Setting

CPI

March 2.8%; April 2.3%; May 2.6%

Sept 2024 CPI was previously published at 2.2% at the time rent increase was being considered for 2025/6

September’s CPI traditionally used as benchmark/indicator to determine the increase for many government benefits including state pensions

2019 Periodic rent consultation

Local Authority Stock Overall opinion Braddan 185 Agree with proposals Douglas 2360 Agree with proposals Cooil Roi (sheltered) 34 Agree with proposals Port Erin 215 Require more information before engaging Rushen 4 Pros and cons of proposed policy PSM 122 Agree with policy principle 1 only Marashen Crescent (sheltered) 136 Do not agree with proposals Ramsey 553 Do not agree with proposals RNDHC (sheltered) 144 Do not agree with proposals
Onchan
508 Do not agree with proposals Peel 357 Do not agree with proposals Peel & Western (sheltered) 89 Do not agree with proposals Castletown 258 Do not agree with proposals Castletown & Malew (sheltered) 42 Do not agree with proposals

Department of Infrastructure Public Estates and Housing Division, Sea Terminal, Douglas, Isle of Man, IM1 2RF www.gov.im/infrastructure

public estates and housing division fo-rheynn steatyn as thieys theayagh

Confidential – Embargoed until 24th November 2025

To All Local Housing Authorities (via email)

Dear Colleagues

2026/27 Public Sector Rents and Allowances

I am writing to update you on recent discussions regarding the annual rent setting process.

From April 2026 a new, more streamlined approach will be taken, which will incorporate a metric to ensure that decisions are data driven.

Going forward rent increases will be based upon the Consumer Price Index (CPI). Each year public sector housing rents will increase at a minimum of CPI using the preceding September’s CPI figure.

The Department will monitor increases and retain the authority to intervene if it is felt that rents are rising to unsustainable levels.

From April 2026, public sector housing providers will have the additional ability to increase rents by a further 1% without the need for Departmental approval.

This year the decision to use this discretion must be declared by the date below. Next year it will be earlier, as you will be able to gain the appropriate approvals in advance.

This policy development is underpinned by The Housing Act 1955 Part IV Section 49 (3): “The authority shall from time to time review rents and (subject to the approval of the Department) make such changes, either of rents generally or of particular rents, and rebates (if any) as circumstances may require.” 1) The annual increase in public sector rents with effect from 1st April 2026 will be 2.9% for landlords implementing the minimum increase. The rent point value therefore increases from 1.797 to 1.849.

2) Landlords applying the additional discretionary uplift (+1%) will use a rent point value of 1.867. 2) The administration allowance will remain 7.0% of the total rental income.
3) The maintenance allowance will remain 32.5% of total rental income.
4)
The community reserve (for Older Person’s Housing) will remain at 8.4% of the total rental income.

Our Ref: HOH/LJP Date: 27th October 2025

5) The deadline for declaring your planned increase is 17th November 2025, and notification should be sent to

You will be aware, following the recent Public Sector Housing Conference, that additional changes to empower housing providers are being considered; these will be developed further, along with additional detailed policy prior to additional consultation taking place. It is envisaged that these additional changes may be implemented as early as April 2027. If you have any queries about your organisation’s anticipated rental income for the coming year, or the allowances that should be deducted then please contact Rachel Smith, Business Support Manager, for any further information you may require. Your intention to utilise the additional 1% rental levy increase should also be declared to Rachel. Yours faithfully

Lisa Philliskirk Head of Housing
On behalf of the Minister for Infrastructure Section 25 Business Cases and Petitions for Housing Projects or Schemes Business Case Overview A Business Case outlines the rationale for a new project or scheme. The Department’s Local Authority Liaison Officer will: • Review the business case for public sector housing-related projects. • Offer advice or alternative solutions. • Notify the Local Authority when the business case is ready to progress to the petition stage. Note: There is no formal Departmental approval of business cases. The Liaison Officer simply confirms readiness to proceed. What Should a Business Case Contain? • A feasibility study outlining the need, identify any issues and options with potential outcomes • Outline the design/scheme proposal including specifications • Relevant assessments, notable risks and impacts – a LA Business Case template is available to assist with providing this information • Detailed breakdown and analysis of costs • Estimated costs and timeline/programme • Recommendations Petition Requirements All petitions must follow the Procedure Notes for Management of Construction Projects ('Capital Procedures'). Petition Letter Must Include: • The project and use of funds (stage of project) • The actual cost and breakdown for professional fees, construction cost and approval fees • HSBC quote, including repayment total, number of years for agreement and Sonia overnight rate estimate, interest and estimated total payable • Estimated drawdown dates • Business Cases and Stage Reports should be provided to support a petition. Please Note: The above petition process is for Housing schemes/projects only. If connected to rate-born projects, they will need to be separated as they follow different processes. Approval Process • The Petition letter should be sent to the Local Government Unit in the 1st instance to commence the Departmental approval process. • Once the petition has been approved, LGU will contact the LA via email with a scanned approval letter (a hard copy can be provided on request). Housing Need – issues experienced by local authorities across the island

Housing Need – issues experienced by local authorities across the island

Advantages to a shared housing list
1. Improved Access and Transparency • Applicants only need to register once to be considered for housing across multiple areas/authorities.
• This simplifies the process and makes it easier for people to understand their options and track their application status. 2. Better Use of Housing Stock • Shared lists allow local authorities to match applicants to available homes more efficiently, reducing void times and ensuring homes don’t sit empty unnecessarily. 3. Enhanced Collaboration • Local authorities can share information and coordinate efforts, leading to more strategic planning and better support for vulnerable households, such as those experiencing homelessness. 4. Fairer Allocation • A unified system helps ensure consistent and equitable application of allocation policies, reducing the risk of duplication or applicants being unfairly prioritized in one area over another. 5. Cost and Resource Efficiency • Pooling administrative resources can reduce duplication of effort, streamline staffing needs, and lower IT and operational costs. 6. Greater Mobility for Applicants • Applicants can access a wider range of housing opportunities, especially useful for those needing to move for work, family, or health reasons. 7. Data-Driven Decision Making • A shared system provides richer data on housing demand and supply, helping authorities plan better and advocate for funding or policy changes.

Challenges to a shared housing list 1. Complexity of Coordination • Different policies and priorities across local authorities can make it difficult to align allocation criteria. • Authorities may have varying definitions of housing need, eligibility, and priority bands, leading to inconsistencies. 2. Data Management and Privacy • Sharing sensitive applicant data across multiple authorities raises data protection concerns and requires robust systems to ensure compliance with GDPR and other regulations. 3. Resource Imbalance • Some local authorities may have more housing stock or funding than others, leading to unequal access or perceptions of unfairness among applicants. • High-demand areas may become overwhelmed if applicants from lower-demand areas flood the shared list. 4. Loss of Local Control • Local authorities may feel they are losing autonomy over who gets housed in their area, especially if allocations are made based on island wide rather than local priorities. 5. Technical and Administrative Burden • Implementing and maintaining a shared system requires significant investment in IT infrastructure, staff training, and ongoing coordination. • Errors or delays in syncing data can lead to missed opportunities or confusion for applicants. 6. Increased Demand • A shared list can increase visibility and accessibility, which may lead to a surge in applications and longer waiting times, especially in areas with limited housing stock. 7. Risk of Displacement • Applicants may be housed in areas far from their support networks, schools, or jobs, which can affect wellbeing and stability.

Rent setting 2026/27 - Approval of CoMin report and letter to Local Authority housing providers

Page 1 of 6

Template - Version 11 Paper No:
TO BE PROVIDED BY HUB TEAM

INFRASTRUCTURE DECISION PAPER Title:

Rent setting 2026/27 - Approval of CoMin report and letter to Local Authority housing providers Purpose:

To gain approval of report informing CoMin of new approach to annual rent setting in line with CPI and the letter to be used to inform Local Authorities of this approach and including this year’s CPI figure. Officer:

Lisa Philliskirk Date:

10th October 2025 Date Received in HUB: To be completed by HUB Team only.

1 PLEASE INDICATE ANY SPECIFIC DEADLINES THAT YOU ARE WORKING TO [Insert Date] 2 IS THIS PAPER IN RELATION TO TYNWALD BUSINESS? [Please Indicate Which Sitting Of Tynwald The Business Is Going To] No 3 IS TREASURY APPROVAL/CONCURRENCE REQUIRED? Not Required

4 IS COMIN APPROVAL REQUIRED? Not Required

51 IS AN EQUALITY IMPACT ASSESSMENT (EQIA) REQUIRED?
No 6 IS A DATA PROTECTION IMPACT ASSESSEMENT (DPIA) REQUIRED? If you require any guidance on completing a DPIA, please contact our DPO – Lee Johnson on DPO-DOI@gov.im or Lee.Johnson@gov.im.
No 7 HAVE YOU COMPLETED A CLIMATE CHANGE IMPACT ASSESSEMENT (CCIA) REQUIRED? With effect from 1st January 2025 the Climate Impact Assessment Regulations 2023 come into effect and it will be mandatory to prepare a CCIA in certain circumstances. User guide can be found via this link: CIA User Guide Yes - CCIA Completed 8 CLIMATE CHANGE ACT 2021 - Is the proposal compliant with the Department’s duties under the Climate Change Act 2021? [where mitigating actions are required please describe in the body of the paper] Yes - mitigating actions are not required

9 LEGISLATIVE PROGRAMME - Is this proposal on DOI’s legislative programme?
N/A - not legislation

10 Primary Legislation only – Impact Assessment completed? No - not required 11 LEGAL ADVICE - Has legal advice been obtained? Not Required 12 Divisional Director See below Comments This report has been actioned to progress work requested by the Housing Agency

1 Combined Climate, Data Protection and Equality Impact Assessment Tool: Combined CIA, DPIA & EIA Tool

Page 2 of 6

Template - Version 11 APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate] Signed:

Housing Agency direction Date: 13 Finance Business Partner Comments

APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate] Signed: Date: 15 Chief Officer Comments

APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate] Signed: Date: 16 Political Member – Ms Joney Faragher, MHK

APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate]

Signed: Date: 17 Political Member – Mr Lawrie Hooper, MHK

APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate]

Signed: Date: 18 Political Member – Mrs D Kinnish, MLC

APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate]

Signed: Date: 19 Minister Minister Dr Michelle Haywood

Comments

Page 3 of 6

Template - Version 11

APPROVED/REFERRED BACK/REJECTED [Please delete as appropriate]

Signed: Date:

Page 6 of 6

Template - Version 11 7. Recommendation

To approve the submission of

(i) Appendix 1 informing the Council of Ministers of the new approach to annual rent setting and,
(ii) Appendix 2 to inform Local Authorities of this approach and this year’s CPI figure to be applied. (this will be included for submission to CoMin) (iii) Press release to the Communications team for final amendments (iv) Treasury Report

From: Philliskirk, Lisa To: Kermode, Gary; Barks, Shane Cc: Smith, Rachel (DOI) Subject: For action - Dept appravel paper - Approval of 2025 rent setting policy.docx Date: 13 June 2025 13:54:00 Attachments: Approval of 2025 rent setting policy.docx Hello   Find first draft of approval report to go with policy. It’s missing the main appendix that I sent you yesterday as it needs agreeing. It is short and simple because the first paper held the detail.   Thanks   Lisa From: Philliskirk, Lisa To: Barks, Shane Subject: FW: Rent Setting Change Notification.docx Date: 10 October 2025 10:10:00 Attachments: Rent Setting Change Notification.docx     From: Philliskirk, Lisa Sent: 09 October 2025 17:57 To: Barks, Shane Subject: Rent Setting Change Notification.docx   Hi Shane   I’ve now got the Infrastructure paper asking permission to submit the CoMin notification paper ready to send to DOI papers. You said that we would need to do a report to Treasury I’ve taken you at your word and produced this, which would have the other reports appended.   Is it what is needed and what do I need to do with it? What goes where first?   Thanks   Lisa Section 25 Section 35 From: Philliskirk, Lisa To: Smith, Rachel (DOI) Subject: FW: Treasury paper - Rent Setting Review Date: 10 July 2025 14:35:00 Attachments: 250703 Draft Rent Setting Review Treasury Paper.docx image001.gif I’ve literally lost the plot   From: Barks, Shane

Sent: 10 July 2025 14:26 To: Bradley, Mark (DOI) DOI,

[Response truncated — full text is 33,953 characters]