Council chiefs in Scotland’s Capital are to lend over £21 million to Housing Associations in the city to facilitate the building of another two hundred affordable properties in order to help with the current housing shortage.
The new homes will be covered by landlord insurance before being leased to tenants for what is being classed as a “mid-market” rent. This will be set somewhere between social and private rents, but at a level that low-income working families can afford.
The council are planning to borrow the money needed before lending it to registered social landlords throughout Edinburgh. The social landlords are themselves finding it extremely hard in the current climate to borrow money. The idea behind the plan is that the council will lend the money to social landlords who in turn will provide properties for tenants on a low income, with the cash involved improving Edinburgh’s chances of meeting the current high demand for rental properties.
There is currently a demand for over four thousand homes from low income families who are unable to buy their own properties. Although they can’t afford to get on the property ladder they are also highly unlikely to be given priority for social housing because they are working. Edinburgh is the most popular place to live in Scotland, with around 130 bids placed for each property advertised by both the council and social landlords.
City housing leader, Councillor Paul Edie, said “This initiative is an innovative way of dealing with the shortage. The council can borrow money much more cheaply than registered social landlords so we are using our prudential borrowing muscle here. We are going to invite bids so that every registered social landlord in Edinburgh has an opportunity. We have a chronic shortage of affordable housing in the city, which includes mid-market rent for hard-working families.”
The £21m is expected to fund 70% of the cost of building the new homes, with social landlords getting the other 30% from private lenders. The council expect to make an official decision in August.