Council tenants in Midlothian will be asked their views on a rent increase of up to 6% next year as the local authority faces a loss of £580,000 in income.
A public consultation on next year's proposed rent rise will be carried out over the winter with sitting tenants and those on waiting lists invited to take part.
A report to elected members has revealed hundreds of council homes which are classed as 'new builds' and charge a premium rent will lose their status over the next three years reducing the rent that can be collected.
READ MORE: Midlothian cost of living task force proposes free laundry day for families
And it said a rent increase would be needed to build more new homes to support a waiting list of 4,237 households, including more than 600 homeless ones.
Councillors meet in person for the first time in two years tomorrow (Tuesday) and will be asked to support the plans to take rent increases to tenants as part of a public consultation.
A report to members sets out options which will be put to tenants ranging from a 4.1% increase which would see no new houses built to a 6% increase which would fund 1,000 new homes.
The costs include an additional funding requirement on the council created by the Energy Efficiency Standard for Social Housing (EESSH) introduced by the Scottish Government to improve the energy efficiency of social housing by reducing energy consumption, fuel poverty and the emission of greenhouse gases.
It is currently estimated that bringing current council housing up to the required standard over the next decade will cost Midlothian £140m.
The report also revealed the council partly funds new build sites from rental charges, including a premium of 25% on new build homes for the first 15 years they are let.
It said: "Many of Midlothian Council’s new build sites are approaching 15 years old, after which the rent will reduce to the level of the legacy stock homes."
It means over the next three years rent will reduce on 467 homes reducing the council's annual rent income by just under £580,000.
The report said: "The Scottish Housing Regulator recommends that landlords consult tenants about rent increases in ways that enable them to express
informed views on options for different rent levels with clear information on what they mean for services and investment in homes."
Councillors will be asked to approve a recommendation to put the rent increases out to consultation with all tenants and waiting list applications with a report due to come back to councillors in February.
READ NEXT:
Midlothian Library staff to be trained to use heroin antidote kits
Edinburgh cabbie loses appeal over house for kids - as garden is too small
Former Midlothian library site to be turned into low energy social housing
New Midlothian homes rejected as 'undesirable' by Scottish Ministers
Midlothian homeowner loses appeal to keep 'pretty ugly' windows that open wrong way
