Rents for council tenants in Falkirk will rise in April, but councillors are being warned that a small increase may not be enough to cover costs.
While it is unlikely for rents to rise more than two per cent this year, councillors are being told that a four per cent increase for the next four years will be needed to keep up with costs.
Falkirk Council meets on Thursday to discuss future plans for housing across the district including spending £40 million on housing repairs and improvements, including re-roofing and rough casting as well as long-awaited new heating systems for tenants in off-gas areas.
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Tenants are expecting a two per cent increase as this is the final year of a three-year agreement with them following a consultation.
There are also increasing signs that many people are already struggling, with rent arrears increasing as the cost of living continues to rise.
A report to councillors highlights that a two per cent increase would mean an average increase of £1.47 taking the average weekly rent to £74.82.
Members are also reminded that more than half of all council tenants get housing benefit or the housing element of Universal Credit, which means those on the lowest incomes will be fully protected from any increase.
However, all of the council's spending on housing must be self-financing through its rents and there are fears that a low increase will have an impact on the council's ability to invest and also to build or buy-back council housing that is desperately needed locally.
The report warns: "If rent levels are not kept at four per cent in the short term, it is likely that the proposed housing investment programme will become unaffordable."
The investment of £39.9 million will make improvements to around 8500 council homes in 2023 to 2024. A total of £28.5 million will be spent on re-roofing, kitchen and bathroom upgrades and a replacement programme for doors and windows.
Another £8 million has been earmarked to continue the ongoing programme of heating system upgrades to around 1100 council homes and to install more cost effective and efficient heating systems for tenants in off-gas areas.
And £3 million could also be spent on fencing, wall and path upgrades.
On top of that, over the next five years the council hopes to build a further 555 new affordable social housing properties.
But rising inflation is having a major impact on construction costs and legislation to tighten up standards in housing has also been putting increasing pressure on the housing budget.
As background to the councillors' decisions, the Scottish Government had introduced a rent cap and a moratorium on evictions as a response to the rising cost of living crisis.
Those measures will end on March 31, and a new agreement between the Scottish Government and local authorities will come into force.
That means no local authority can increase its rents by more than £5 a week, although none of Falkirk Council's proposals are near that limit.
The council also has an eye on other local authorities which have said they intend to introduce higher rent increases than Falkirk.
