The official version of this document can be found via the PDF button.
The below content has been automatically generated from the original PDF and some formatting may have been lost, therefore it should not be relied upon to extract citations or propose amendments.
1240/5(2805)
WRITTEN QUESTION TO THE MINISTER FOR HOUSING BY DEPUTY G.P. SOUTHERN OF ST. HELIER
ANSWER TO BE TABLED ON TUESDAY 28th MARCH 2006
Question
In part (b) of his answer to my question on Le Coie funding on 14th March 2006, the Minister suggested that rent rebate for the 95 flats "could not be forecast". Would the Minister inform members –
- w h y theestimate for rent rebate on the sitewas stated as £415,000perannumby the then Presidentof the Housing CommitteeinP.161/2003?
- w h at the total estimated cost intermsof capital expenditure, interest subsidy and rent rebate expenditure of this project to the public will beover the 21 year periodofthepurchaseof this projectby the Jersey HomesTrust?
Answer
- In P.161/2003, the figure o£f415,000 perannumfor rent rebate wasan 'estimate' based on the likely number of claimantsof rent rebate oncompletionof the site, somethree years later. Fairrents for socialhousing have not increased for two years. This will affect thelevelof rebate to be paid.Thedevelopment will becompletedin July 2006 and, therefore, a precise figure for rent rebate will be available shortly.
- Inrespectof capital expenditure, this is currentlyas follow- s :
• Site Cost £4,200,000
• Demolition £319,902
• Brook £98,557
• Main Contract £12,798,318
• Fees £837,249
• Other Costs £418,439 (feasibility studies, specialist sub-contractors)
T o tal £ 1 8,672,465
A final figure will be produced when the project is completed In respect of the interest subs-idy:
The Jersey Homes Trust (JHT) will fund the purchase by commercial loan. The States, through the Housing Development Fund, will meet the Trust's interest charges above 4%. As the loan is based on a margin above base rates, the cost to the States will vary as base rates move. At the current base rate of 4.5%, the annual States interest subsidy will be some £152,000 in the first year, reducing as the outstanding loan balance diminishes, giving a total sum in the order of £2 million over the 21 year period. Allowing for a reduction in the time value of money over the 21 year period at a rate of 3% per annum, the net present value of the estimated interest subsidy is some £1.63 million.
In respect of rent reb-ate:
Any rent rebate payable will depend on the individual circumstances of the tenants. The cost will be the same whether realised as rent rebate payments or foregone rent abatement, if the property were retained by the States. The introduction of the Income Support Scheme in 2007 will see the distinction between rent rebate and rent abatement disappear.