A report to the city council’s housing committee on January 25 proposes the increase that will help to ensure £6 million of investment in new council houses and £250,000 to create a hardship fund for council tenants.

The report also recommends a move to a payment period of 52 weeks rather than the existing 48 to help tenants budget, bring it in line with Universal Credit and create a lower weekly payment.

John Alexander, convener of the housing committee, said: “More than 1700 people took the opportunity this year to let us know what rent increase option they feel offers the most appropriate level of future investment in our housing stock.

“I am always impressed not just with the numbers of people who engage with the process but also the depth of knowledge they have. It demonstrates that our tenants are fully engaged with the council and its aims for social housing in future years.

“Choosing the option of the lowest proposed increase in since Dundee City Council was created in 1996 still allows us to support tenants who are suffering because of welfare benefits changes and invest more money in building modern, fuel efficient council houses.

“The increases that have been signed up to by tenants as part of the consultation process will ensure not only future investment but the ability to maintain and improve service standards.

“We are also protecting the over 60s by freezing sheltered housing charges for the third year in a row.

“In recent times we have consistently delivered the lowest increases in decades, and for the past three years have also frozen the communal cleaning and lock-up rental charges.”

Kevin Cordell, depute convener of the housing committee, added: “This is a massive annual engagement exercise that allows us to take tenants’ views into account as we seek to strike a balance between rent levels and the investment required to meet expectations.

“We are already starting to deliver on our ambitious plans to regenerate public sector and social housing in the city, and tenants have recognised that this level of increase will allow us to continue that transformation.”

In November and December last year local events were set up in community centres, libraries and local offices to discuss the proposed rent increase with tenants and their representative bodies. Material was also available from housing offices and on the council’s website as well as at displays at busy locations across the city.

The consultation took in the views of tenants, encouraging feedback via an online survey, email and SMS.

If councillors back the proposed rent increase it will work out at an average of 69p more per council house per week over 52 weeks for the year beginning in April 2016.

While tenants will pay the same total amount of rent they will be asked to move to paying over 52 weeks instead of 48 in order to fall into line with the payment regime for Universal Credit, due to be introduced later this year.