More than 1000 low cost rental homes could be built on derelict ground on the waterfront if developer Forth Ports secures a £76 million loan from the Scottish Government.
An initiative launched in April last year invited housebuilders to bid for a government loan to build homes for the thousands of people in Edinburgh who are unable to afford rent at normal market prices.
There are approximately 145,000 households in the city who currently qualify – have a joint household income of less than £39,000 and be economically active – for the “below market rent” or mid market rent homes.
Forth Ports chief executive Charles Hammond said the government initiative was an innovative way to address the clear demand for good quality, affordable housing.
“This proposal builds on the two phases of the scheme at Western Harbour, which have been extremely successful. It will also finish the job at the waterfront by completing the infrastructure and allowing us to satisfy the demand and create a quality development that gives people a place to stay and a chance to get on the housing ladder.”
Last year Forth Ports released 96 mid market homes as part of phase 1 at Western Harbour which attracted 3,400 applicants.
And property experts Rettie, who manage the flats on behalf of Forth Ports, have already received over 650 notes of interest for phase 2, due to be available by spring next year.
“We had completed analysis which showed there was significant and steady demand for this type of housing within the city for a long period of time and felt confident that if the product was attractive enough, it would prove successful,” Mr Hammond said of the first phase. “But even we were surprised by the level of interest and number of applications received for the first two phases.”
Applications for the loan initiative, which are currently being assessed, will be announced by the Scottish Government in “due course”.
And Mr Hammond is “hopeful” Forth Ports will be successful in securing the funding. “We have delivered the first two phases of this initiative and it would be a very natural thing to do, to complete the job over the next few years.
“This is nationally significant waterfront development in Scotland’s capital – it is a successful and growing city and if the loan was awarded to Forth Ports, the development will add to Edinburgh’s success.”
The £76 million loan will be repaid over 25 years and unlike a government grant, means the money will return to the public purse.
It will contribute to 36 percent of the development cost with an injection of 64 percent from private investment.
The number of households in Scotland is projected to increase by 17 percent to 2.78 million,
Mr Hammond added: “It’s a reflection of society’s urban dynamics with a lot more younger professionals looking for quality affordable housing, who will gradually want to move up the ladder, but if you don’t feed the market at this level then you are in danger of starving it at a higher level.”