Rent strategy ensures quality and affordability for local residents
Midlothian Council has agreed its Rent Setting Strategy for the period 2026/27 to 2028/29, approving an annual rent increase of 5.42%.
Supporting major investment
The decision will support major investment in existing council homes, help meet national energy efficiency requirements, and enable the development of additional affordable housing across the county. The strategy will come into effect from 1 April 2026.
Balancing Affordability and Investment
The Housing Revenue Account (HRA) is funded entirely by tenant rent and is used to manage, maintain and improve council homes. As of January 2026, Midlothian Council owns 7,478 homes and 1,267 garages and lock‑ups, generating rental income of just over £36.2m in 2024/25.
New homes planned due to high demand
Demand for affordable housing remains high, with 6,514 households currently on the council’s waiting lists, including many in urgent need. To address this, the most recent Strategic Housing Investment Plan (SHIP) outlines 673 new council homes planned between 2026/27 and 2030/31.
Details
The approved rent strategy supports:
- Continued improvement of existing housing stock
- Delivery of national energy efficiency standards (EESSH and EESSH2)
- Completion of Phase 3–5 new build programmes already underway
- Investment in additional sites identified in the most recent Strategic Housing Investment Plan (SHIP)
Meeting these commitments requires long‑term financial planning.
Consultation
The council carried out a comprehensive consultation between 3 November - 12 December 2025. This included an online survey, paper surveys and local drop‑in events. A total of 709 valid responses were received.
Rent options and key findings
During the consultation, tenants and applicants were asked to choose between six rent options, ranging from 4.77% to 5.84%.
- 29% supported the highest increase (5.84%) to fund the most new homes
- 28% supported the lowest increase (4.77%)
- 10% supported the mid option (5.42%)
The agreed 5.42% increase represents an intermediate option. Even with the agreed increase, average rents are projected to remain below 30% of gross household income, which is the generally accepted threshold for affordability.
Balanced approach
Midlothian Cabinet Member for Housing, Cllr Stuart McKenzie said:
“This rent strategy ensures we can continue to invest in our existing housing stock while delivering the new council housing that is needed in Midlothian. We are grateful to everyone who took part in the consultation, and their feedback has been central to shaping this balanced and sustainable approach.”
Follow up
The associated Housing Revenue Account Budget and Capital Plan for 2026/27–2028/29 will be presented to council in February as a separate report.