Perth and Kinross Council is proposing a major step forward in delivering affordable housing by adopting Mid Market Rent (MMR) as a key part of its housing strategy.
Mid-Market Rent is a form of affordable housing. It provides homes at rents set between social housing and private market levels, offering an option for those who cannot access social housing but still require an affordable alternative to the private sector.
If councillors approve the proposal, the local authority will establish a new Limited Liability Partnership (LLP) to deliver MMR homes directly.
The first phase would see the Council acquire 13 new homes at Westfields, Rattray, helping meet growing demand from households who earn too much to qualify for social housing yet are unable to secure a mortgage or afford rising private rents.
The report to the Housing and Social Wellbeing Committee highlights the continuing pressure on local housing, with many single and working households unable to access suitable and affordable homes.
In Perth and Kinross, the average house price in 2022/23 stood at £274,907, which would require an income level well above what many essential workers and young families earn.
In many cases, a typical mortgage would require a household income in the region of more than £40,000, depending on deposit size.
At the same time, private rent levels remain higher than the Local Housing Allowance, creating affordability challenges for those who do not qualify for social housing.
Mid‑Market Rent provides a bridge between these two options.
These homes are aimed at households on low to moderate incomes—often those employed in vital local roles—who need good‑quality, long‑term housing but cannot buy a home in the current market.
The report sets out a detailed business case recommending the establishment of an LLP as the most effective and financially sustainable delivery model.
This would allow the Council to own and manage MMR homes while meeting the legal requirement that such tenancies must be delivered through a private residential tenancy rather than directly by a local authority.
External specialists, including Burness Paul and Scottish Futures Trust, have contributed expert advice to ensure the proposed model is legally robust, financially compliant and ready for long‑term expansion.
If approved, the Council would borrow £1.38 million from the general fund and on‑lend it to the new LLP to acquire the first tranche of 13 new homes at Westfields. The LLP would repay this investment over 30 years, after which any surplus would be reinvested to provide additional MMR homes across Perth and Kinross.
Councillor Tom McEwan, convener of Perth and Kinross Council's Housing and Social Wellbeing Committee, said: "We know that many working families in Perth and Kinross are caught in the middle: they earn too much to be prioritised for social housing but simply cannot afford a mortgage or high private rents.
"Mid‑Market Rent offers a fair, secure and affordable alternative. These proposals will give more local people the chance to live in high‑quality homes within their communities, supporting wellbeing, stability and opportunity for families across the area."
Demand for MMR continues to grow locally, with current supply from Registered Social Landlords unable to keep pace.
By taking a more active role through its own delivery vehicle, the Council will be able to provide greater choice, more flexibility in allocations, and a more secure tenure option than the wider private rented sector can typically offer.
The proposals, if approved, will place Perth and Kinross Council among a small group of Scottish local authorities delivering MMR directly and provide a scalable model capable of expanding to additional sites over future years.
The Housing and Social Wellbeing Committee meets on Wednesday, 25 March.
