Housing costs ‘hitting the lower earners’
THE ‘finely balanced’ budgets of lower-income families will be hit harder by the rising housing costs that are driving the Island’s high inflation rate, a charity chief executive has said.
Last week the latest Retail Price Index, produced by Statistics Jersey, revealed that Jersey’s cost of living increased by 3.9% last year, which was almost double the UK rate of 2%.
The biggest driver of inflation in Jersey was housing costs, which increased by 5.6% over the period. Citizens Advice chief executive Malcolm Ferey said that the housing figures were the ‘biggest concern’, with many lower-income Islanders already living in ‘rental stress’, which is when more than 30% of their income is spent on housing costs.
‘After the last RPI being 4.3% we were expecting this one to be high, and there are a lot of the usual suspects, like housing costs, behind it,’ he said.
‘House prices were the main driver, and maybe that reflects the economy doing better, with more people buying homes, and that can be a good thing.
‘But for people on the lower end of the income scale these increases in rent can put real pressure on already finely balanced budgets. A lot of our clients have said that their rents have gone up quite a bit in recent years. So on top of already high increases, family budgets are going to be stretched.’
Mr Ferey added, however, that the findings of the RPI report were not all bad news, most notably in food prices, where the inflation rate was only 1.2%.
‘On the more positive side, one of things we were expecting to increase was food, and that has only seen a small increase,’ he said.