Council to give sites to developers in bid to kick-start work

Edinburgh City Council is drawing up new proposals to allow firms to build on local authority-owned land without having to buy the plot up front.

Housing leaders said it was clear that many developments have stalled due to difficulties in the property market and new ways must be found to allow new homes to be built.

Developers would enter an agreement to pay for the purchase of the site at a later date.

Housing chiefs admitted there was a risk in allowing developments to go ahead without the land being purchased, but said contracts would be carefully scrutinised to ensure developers would ultimately pay a fair price.

Officials have estimated that for every 200 extra homes valued at an average of £125,000, around 310 jobs would be created. Each project would also generate around £17.5 million of investment in the Edinburgh economy.

There is significant interest in a number of sites, particularly from housing associations, but both they and private developers lack the lump sums required to purchase land because of uncertainty in the market and the difficulty in securing big loans from banks.

Until 2008 the local authority could almost guarantee that any land it brought on to the market would be snapped up by housing firms. Now however, housing chiefs face a struggle to sell off spare land.

Cammy Day, the city’s housing leader, said the new move would allow sites such a Royston Primary, in his constituency in north Edinburgh, to be freed up to create affordable homes.

He said: “There are huge challenges ahead and we are always looking at creative ways to deliver more social and affordable housing in the city.”

City Park is one example of a council-owned site that could provide a large number of affordable homes.

Miller Homes secured planning permission for 200 homes at the site off Ferry Road in 2009 but no longer has an interest. Link Housing and Smarts now hope to develop the site with 75 per cent affordable housing and 25 per cent market housing, which the council is considering.

The council lost £37.1m in expected takings between 2008 and 2011 due to not being able to sell off land that housing chiefs had expected to shift.

It also expects to lose a further £2m this year due to a huge drop in the number of council tenants able to buy their home from the council.

Councillors will formally approve the plans next week.

Lynsey Anderson, spokeswoman for the Scottish Building Federation, said: “As of March 2011, there were more than 25,000 names on Edinburgh’s housing waiting list, so there’s clearly a desperate need for more affordable homes. Meanwhile, between 2007 and 2010, the local construction industry has shed more than 5000 jobs so it’s an important sector in real need of support.”