DoI to change rent-setting model for public sector housing 

Changes to come into force in April 2026

The Department of Infrastructure (DoI) is to change the mechanism for setting public sector housing rents across the Island from April 2026.

It will apply to both DoI Housing Agency tenants and Local Authority housing tenants.

From next year, annual rent adjustments for more than 6,200 public sector properties will be directly linked to the previous year’s September Consumer Price Index (CPI). 

The expected annual increase will be the September CPI rate - with an option for housing organisations to add one percent more at their discretion.

Previously, rent increases were determined by the DoI following representations from Local Authorities, however this process was not considered transparent enough, with no clear guidance about the rationale used for setting the rate.

Furthermore, government has been moving towards an annual uplift of fees and charges across all government services, usually linked to the relevant index.

Government says the change aims to modernise the rent-setting process by aligning annual increases with the Island’s economic conditions while improving financial predictability for both tenants and landlords.

The department says to assess the potential impact before changing the mechanism, it looked at what the impact of the rent rise mechanism would have been if it had been applied for the last 14 years.

The analysis showed that the average annual increase would have remained largely unchanged. 

If, during that period, all landlords had chosen to apply the optional additional one percent, the overall difference would have been just 0.2 percent higher than the current situation.  

However, a scenario where all landlords chose to impose the extra one percent rate every year is considered unlikely.

A key feature of the policy is a safeguard clause: if inflation spikes and proposed rent increases were untenable, the department has retained the ability to intervene and set a lower rate. 

The policy aligns more closely with the Housing Act 1955, which requires regular rent reviews and departmental approval for changes.

Many benefits from Treasury’s Social Security Division are set with reference to the September CPI, and aligning rents with this mechanism will ensure that the increases are affordable for tenants on minimum or living wages.

Housing Authorities will be required to notify both the department and tenants of their decision to utilise any discretionary increases, and all tenants will receive formal notice of their new rent levels ahead of the 2026 financial year.