Housing Finance and Rent Strategy 2026 – 2031 approved

The Housing and Property Committee met today (Wednesday 5 Nov 2025) and considered an update on the development of a long-term Financial Strategy for the Housing Revenue Account (HRA), including a proposed Rent Strategy for 2026–2031. Members agreed a set of key principles to guide financial planning and rent setting and also recommendations for the upcoming annual tenant rent consultation.

Housing & Property Committee Chair, Cllr Glynis Campbell Sinclair, said: “The financial environment remains challenging. In addition, the demand for new housing is also evident. The Highland Housing Challenge has identified the need to double the number of homes in the region over the next decade, across all tenures, including the social rented sector. To help meet this demand, the Council must ensure the HRA is financially robust and sustainable, enabling continued investment in both existing housing stock and new supply.

The report considered by Members today:

• Confirmed that The Highland Council rents remain significantly below the national average for registered social landlords.
• Summarised the operation of the HRA and the external factors influencing financial planning.
• Set out the principles underpinning the Financial Strategy, including service continuity and increased investment.
• Provided baseline cost estimates for the HRA for 2026–2031.
• Detailed the proposed tenant consultation process and the financial implications of various rent increase options.

A consultation on proposed rent increased will run from 17 November until 5 January.  This consultation will be based on recommendations for either 8, 9 or 10% rent increases which will equate to an average rent increase of between £7.16 and £8.95 per week based on current average Council house rents.

The consultation will also provide tenants with details of what they can expect from recommended rent increases. For example, the 8% increase per annum for 5 years will:

• Double the Council’s affordable housing programme.
• Deliver £117m of mainstream capital investment in existing houses.
• Reduce the loan charge ratio by over 7% by 2032.

The findings of the tenant rent consultation will inform the proposals to be considered by Committee in January 2026. Committee will be asked to approve the Financial Strategy including a Rent Strategy 2026-2031, and this will include the rent increase levels for this period, including detailed budget breakdowns for 2026/27.

The long-term Financial Strategy and Rent Strategy 2026–2031, will provide a framework for long-term decision making, ensuring the HRA remains strong, sustainable, and responsive to the needs of current and future tenants across Highland.

The full report can be read here (Item 8).