Public sector rents in the island will increase by 3.1%, from April 1.

It will bring the average weekly rent of a one-bed flat up by £1.74 to £57.83 and for a three-bed house, the average weekly rent will increase by £2.96 to £98.48.

The Department of Infrastructure says the intention is to balance affordability for tenants with the need to pay off existing housing loans and to continue to fund investment in public sector housing.

Infrastructure Minister Ray Harmer MHK said: ’The taxpayer subsidises public sector rents, which remain low in comparison with our neighbours in the British Isles.

’However, we also recognise the cost of living challenges being faced by some of our tenants, particularly those on fixed or low incomes.

’Our aim is to maintain affordability, while protecting the public purse and targeting need.’

The revised charges follows consultation with the island’s 16 local housing authorities.

The 3.1% increase includes 2% to meet rising costs and 1.1% ring-fenced to increase maintenance allowances for local housing authorities.

The 1,600 tenants who have their rent costs met by the Government as part of their income-assessed Social Security benefits will not be affected.

A DoI spokesman said: ’The department considered a number of factors before setting rents for 2018-19, with the focus on affordability, service delivery and sustainability.

’Feedback from local authority housing providers ranged from no increase to a rise of 6%, with a number requesting an uplift in administration and maintenance allowances to enable them to deliver housing services effectively’

The government’s shortfall between thecosts between rental income and costs of public sector housing - including the construction of new and replacement properties and the maintenance of existing stock - is expected to be more than £5 million next year.

The spokesman said that the DoI is moving away from annual rent setting in favour of a five-year plan.

The first of the five-year fixed-term tenancies, introduced across the sector from April 2014, are scheduled for review from 2019. The reviews will include assessing the impact on housing demand and property type.