Highland Council plans 7.95% rent hike to raise nearly £900,000
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Highland Council hopes to raise almost £900,000 more a year from a rent hike of 7.95 per cent – between £246.24 and £393.12 a year – if councillors on the housing and property committee agree to the move.
It will also seek to increase what is called the supplemental service charge to tenants moving into new build housing to £15 from the current starting level of £11.84 per week – a 21 per cent rise.
The move has been proposed due to inflationary costs and high interest rates on loan charges and in spite of a major tenant consultation being totally against the change.
Of nearly 2000 tenants who responded to the consultation, nearly half (49.71 per cent) said they preferred the lowest increase of 6.5 per cent when presented with three options.
The report’s author Brian Cameron, the interim boss of housing and building maintenance, defended the move saying that Highland rents are much lower than almost everywhere else in Scotland.
However what the rent hike will do if agreed to individual and family finances is also noted. The report discusses the “potential affordability impacts for individuals.”
Mr Cameron said: "Financial planning for the housing revenue account is particularly challenging at this time.
"The overall economic situation, with inflationary pressure on costs; high interest rates affecting loan charges; as well as the cost of living crisis affecting the household income of many tenants all have to be considered."
A bedsit charged at £64.51 would increase to £69.64 – up by £5.13 a week – whereas the Scottish average is £82.28, similarly a one bedroom property rented at £74.17 will from the next financial year cost £80.07 lower than the average of £87.75.
The picture changed when the 7.95 per cent increase was factored in for properties with two or more bedrooms.
From April, a two-bedroom home will go from £83.80 to £90.46 close to the national average of £90.71.
A three bedroom dwelling that pays £93.44 now will pay £100.87 – above the Scottish average of £98.79 – while four bedroom properties paying £103.07 now will go to £111.26 (the national average is £109.05).
The report also details how any rent increase will place an additional budget pressure on the council’s housing benefit budget for 2024/25, which is estimated at £507,000 – basically by charging more the council will have to pay more too.
The housing and property committee will meet on January 31.