Aberdeen Council Approves 7.5% Rent Hike

Aberdeen City Council has approved its housing revenue and capital budget for 2025/26, which includes a 7.5% rent increase for council tenants. The increase, which aims to generate funds for maintaining and modernising the city's ageing housing stock, has sparked concern about its impact on the city's most vulnerable residents.

The rent increase is part of a larger strategy to meet rising repair, maintenance, and construction costs while ensuring compliance with Scottish Housing Quality Standards. However, with the cost-of-living crisis still weighing heavily on low-income households, many are questioning whether this approach will further strain those who are already struggling to make ends meet.

Council officials initially recommended a 12% rent increase to balance the Housing Revenue Account (HRA). This steep rise was seen as essential to meet the growing costs of:

• Repair and maintenance of ageing housing stock.

• Compliance with Scottish Housing Quality Standards.

• Energy efficiency upgrades, including new windows, doors, and insulation.

• Health and safety improvements such as structural repairs and roof replacements.

• Inflation in construction and borrowing costs.

• Higher employer National Insurance contributions, which have added to the council's costs.

Instead of adopting the full 12%, councillors opted for a more modest 7.5% increase. To plug the gap, they agreed to draw on council reserves and make other budgetary adjustments.

While this compromise is seen as a win for tenants, it still means tenants face a higher rent bill next year, a reality that could push some households further into financial hardship.

The 7.5% rent rise is expected to hit tenants at a time when energy bills, food prices, and everyday costs have already risen due to the ongoing cost-of-living crisis. While the council has set aside up to £1 million for a Rent Assistance Fund, the support may not be enough to cushion the blow for those already struggling to make ends meet.

Councillor Miranda Radley, convener of the Housing, Communities and Public Protection Committee, acknowledged the difficult environment for tenants, stating:

“This budget comes during incredibly challenging times, and we have allocated up to £1 million to a rent assistance fund, to protect our tenants who are struggling through this cost-of-living crisis.”

However, some may question whether a one-off fund is enough to provide lasting support. Last year, this fund supported 150 tenants at risk of escalating arrears, a figure that could rise significantly given the widespread financial strain households are now facing.

With a large proportion of council tenants already on low incomes, even a 7.5% rise in rent could push people closer to arrears, debt, or eviction.

While the rent increase may seem harsh, the council has argued that it is necessary to maintain and modernise the city’s housing stock. The council is allocating:

• £70 million to maintain existing housing and meet the Scottish Housing Quality Standards.

• £55 million to fund new build housing projects, community initiatives, and property adaptations that help people remain in their homes.

42% of the council’s housing revenue is currently spent on repairs and maintenance alone, reflecting the challenges posed by an ageing housing stock. With housing sector costs skyrocketing, the council argues that this level of spending is essential to ensure properties remain safe, warm, and liveable.

Council Co-leader Councillor Ian Yuill pointed out that, despite this year’s rent increase, the council has kept rent rises relatively low over the past four years:

“For the last four years, rents in Aberdeen have increased by an average of just over 2% a year, the lowest of all Scottish local authority landlords.”

However, tenants may question whether the cumulative effect of years of small increases, followed by a 7.5% jump, is sustainable for those already living on the edge of poverty.

The creation of a £1 million Rent Assistance Fund is intended to soften the impact of the increase, but how far will it really go? With the cost of living rising across multiple areas (energy, food, transport, etc.), rent is just one of many financial pressures tenants face.

If last year’s assistance fund only managed to help 150 tenants, how many more will be left without support in 2025/26? Given the rising demand for help from charities, food banks, and advice centres, it’s likely that far more than 150 households could need financial support.

Some have also questioned the long-term sustainability of using a short-term assistance fund as a solution. While it may help households manage their rent for a year, it’s unlikely to offer any lasting protection if other costs continue to rise.

While the council’s financial difficulties are clear, some have pointed out that tenants are effectively paying for national policy changes. One of the cost pressures affecting Aberdeen’s Housing Revenue Account is the increase in Employer National Insurance contributions, which came into effect in October 2024.

Unlike businesses that can pass on increased costs to consumers, councils must balance the books through rent increases or budget cuts. The rent increase could therefore be seen as a direct result of central government policies being pushed down to local level, with tenants left footing the bill.

Councillor Radley called for additional support from the UK Government, stating:

“There are significant challenges our Housing Revenue Account faces, with the impact of rising cost of construction and repairs, made worse by the Employer National Insurance contribution by the UK Government.”

This raises broader questions about the fairness of current government policies. If local councils have to raise rents just to meet increased payroll costs, is the system working as it should?

The rent increase has been approved, and tenants will face higher bills from April 2025. In the short term, the £1 million Rent Assistance Fund may help struggling tenants stay on top of their payments. But longer-term issues around affordability, cost of living, and debt risk remain unresolved.

Without additional government support for councils, tenants may face further rent increases in future years. As the cost of repairs, construction, and staffing continues to rise, Aberdeen City Council, like many others, could be forced to push these costs onto residents.

While there is no doubt that Aberdeen’s housing stock needs modernisation and investment, the question remains:

Should tenants bear the brunt of these costs, or should government funding play a greater role in supporting essential housing services?

Until a national approach to affordable housing is put in place, local councils may continue to rely on rent hikes to cover costs. And for tenants on the lowest incomes, that means living with the ongoing risk of falling into rent arrears, debt, or eviction.

For now, Aberdeen City Council’s approach aims to strike a balance between investment and affordability, but many tenants will be wondering just how much more they can take.