Fife Council house tenants face rent rises of up to 7% next year

Fife Council house tenants could face a rent rise of up to 7% next year as the UK Government’s national insurance payment hike hits.

The increase in employer contributions will add to other financial pressures in 2025-26, say housing officers.

And while its impact on the council as a whole is still being reviewed, any extra payouts will have to be factored in to February’s budget-setting exercise.

Councillors will next week be asked to agree to consult tenants on rent options for the coming year.

And officers are recommending a rise of between 6% and 7%.

The lower figure will take the average weekly rent bill to £91.72 – an increase of £5.19 a week.

And a 7% rise would equal £92.59 a week – or £6.06 more.

Consequences of smaller Fife rent rise laid out

Last year’s rent increase was 5%, a figure also applied to lockups, garages and temporary accommodation.

However, housing chief John Mills says the same rise this year could cause a lower level of service for tenants.

And it could also mean staff reorganisation, the cancellation of contracts with external companies and higher future costs because of maintenance delays.

The housing budget is funded almost entirely by rents and is used solely for council tenants.

It does not receive any contributions from council tax revenue.

And Mr Mills says it already faces a difficult financial position, with a budget gap of £7.6 million.

This is due to high inflation over recent years alongside a decision to keep rent increases below inflation since 2019.

‘Risk national insurance rise will increase financial pressures’

The housing head added: “There is a risk that the recent increase to employers national insurance contributions will increase the level of financial pressures.

“The gap will require to be funded through increased rental income, savings or a combination of both.

“It must be noted, these are recurring pressures that will exist and may increase in future years.”

Mr Mills continues: “It is officers’ opinion that a rental increase of between 6% and 7%  balances both the need to maintain rents at an affordable level for tenants and meet the financial requirements for the HRA (housing revenue account).

This will let the service continue to invest in new council housing and improve existing stock, he says.

A final decision on rents will be made during the Fife Council budget process in February.