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GSD links Govt rent increase to £300m ‘mortgage’

GSD links Govt rent increase to £300m ‘mortgage’

The GSD has suggested that the three per cent increase on government housing rents is needed to service the interest costs on the £300 million “mortgage” secured by the Gibraltar Government over six local housing estates.

The GSD was responding to a Government announcement concerning another housing rental increase of 3% ahead of next week’s Budget session.

Roy Clinton the shadow minister for public finance said: “These increases have nothing to do with correcting an historic anomaly nor a rebalancing for the taxpayer but rather have to happen because of the need to service the interest costs of £11 million per annum on the £300 million mortgage on the housing estates.”

He added that this was made clear to the GSD during the meeting it held with the Government’s technical advisors on the mortgage deal in February of 2017.

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“It means that this and every future Government has to increase rents every year by a minimum of 3% for the next 30 years regardless of the merits of doing so.”

“The increased rents on the mortgaged estates are in effect collected by the Government on behalf of Gibraltar Capital Assets Limited who now own those estates and have to pay the interest on the £300 million.”

“Given the importance of this company, I have requested a copy of the audited financial statements of Gibraltar Capital Assets Limited in the last session of Parliament and I am still waiting,” Mr Clinton said.

He added that a significant side effect of the £300 million mortgage is that the “right to buy” schemes in the mortgaged estates namely Moorish Castle Estate, Glacis Estate, Laguna Estate, Alameda Estate, Mid Harbour and Varyl Begg Estate have apparently been frozen by Government.

This, he said, is probably because to amend the mortgage documentation for each new sale would be too difficult.

“The Chief Minister has so far refused to say what he has spent the £300 million on, maybe in next week’s Budget session he will explain why he needed this money and what he has done with it since 2016?”

“If he doesn’t it will be a discourtesy to the future generations of Gibraltarians who will be burdened with this mortgage.”

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