Andium Homes, the States-owned social housing provider, made the decision to delay the increase after it was revealed that June’s retail price index [inflation rate] climbed to 4.5 per cent while the increase in average earnings figure for the same period lagged behind at 3.5 per cent.
Ministers are now being urged by Andium’s board to reconsider how the annual uplift in social housing rents, which is set by States policy, is calculated.
The States’ Rent Policy dictates that rents in the social housing sector increase at 0.75 per cent above the annual RPI, which would have meant that this year’s uplift, due on 1 October, would have been 5.25 per cent.
Andium’s decision to defer has been accepted by Treasury Minister Susie Pinel and Housing Minister Sam Mézec, who have also both agreed a delay in the annual return paid to the States from Andium, which is currently £28.6 million.
Ian Gallichan, chief executive of Andium Homes, said the board has ‘strongly recommended’ that the current uplift policy is reviewed.
‘We recognised that the June RPI at 4.5 per cent would have caused, under the current States’ Rent Policy, an annual increase in rent of 5.25 per cent for our tenants,’ he said
‘Clearly, the Andium Homes’ board was concerned on their behalf, and given the subsequent publication of the Average Earnings Index at 3.5 per cent, we strongly recommended to ministers that the current calculation method for rent uplifts needs review.’
Andium Homes entered into an agreement on 22 July 2014 with the States to provide an annual return of £26.8 million, which would increase in line with inflation annually.