Council housing rents will rise by 5.75 per cent from April 1 in Rugby.
The proposed increase for the 2014/2015 financial year was announced in November and approved yesterday (Tuesday 11 February) at a meeting of full council.
The increase means an average weekly rent rise of £4.51 for a council home.
The increase follows a government policy which aims to bring parity to housing association and public sector rents.
The council adopted a ‘smoothing’ convergence policy in 2012 - increasing rents gradually over five years - in order to meet the government target.
The policy aims to cushion tenants from larger annual rent increases while allowing the council to avoid more than £13 million in interest payments over the five years.
The interest payments follow a £72.9 million low interest loan the council was compelled to take out by central government to take full financial control of its properties.
The smoothing policy also allows the council to carry on investing in new homes and improving its existing properties.
Work has now started on the development of 23 new homes in Pettiver Crescent, Hillmorton, while next year’s housing budget includes further investment in the improvement programme for council properties.
Improvements include replacing electric with gas central heating, and replacement windows.
Cllr Leigh Hunt, Rugby Borough Council portfolio holder for sustainable inclusive communities, said: “While we understand the rent increase will be hard for many tenants, we must set rents which keep our loan repayments down and allow us to invest in new homes and improve our existing properties.
“Our rents remain significantly below market rents in the private sector and also below those of housing associations.
“Although any increase will be unwelcome, we have worked to minimise the impact on our tenants over the next few years.
“We have put in place measures to help tenants who may be experiencing financial hardship, for whatever reason, and any tenant who has problems paying their rent should call our housing team on (01788) 533822.”