The council said housing costs had increased over the past year

The move came as it emerged that Perth and Kinross Council failed to meet targets on housing provision.

The council said a lack of land and increasing costs were major factors in delays in building new homes.

The authority also warned that it would be difficult to meet the Scottish Executive's target of ending homelessness by 2012.

The council said it would set up a new group aimed at acquiring more land to build affordable housing and speed up the sales process for sites that have already been earmarked.

In the last year the council provided 94 low cost homes for rental - against a target of 130.

'Adequate housing'

The target to provide 20 low cost ownership homes was exceeded, with the figure reaching 36.

Housing convener Gordon Hunter said the affordable housing budget had shot up over the past year but the rate at which new homes were being completed had not increased.

He said: "The lack of affordable housing is one of the most important issues facing Perth and Kinross and we are working positively with many other agencies in an effort to ensure that the area will have an adequate supply of affordable accommodation.

Concerns have been raised about new homes completion

Mr Hunter added that the council was committed to cutting homelessness.

He said: "For Perth and Kinross the target of virtual elimination by 2012 is a very challenging one, given the level of demand and the extreme pressure on the supply of affordable housing."

A shortage of council and private properties to rent has caused a backlog in the number of families being housed in temporary accommodation.

The local authority has indicated a reduction in the number of homeless people in the past year.

Council priorities over the next two years included preventing people becoming homeless in the first place and making better use of temporary accommodation while reducing the use of bed and breakfast.