Buy-to-let investors snap up first phase of affordable homes

Published on Friday 17 October 2008 10:33

AFFORDABLE housing built to help first-time buyers get on to the property ladder has been snapped up by buy-to-let investors.

The first phase of homes built as part of Craigmillar's 180 million regeneration – which will eventually see 3200 homes, new schools, a library and a shopping precinct – were sold in February.

A priority purchase scheme was set up for those currently living in Craigmillar, or former residents who wanted to return.

But already several of the new homes, built by Parc, a joint venture between EDI, Edinburgh City Council and community representatives, are being marketed for rent by private landlords.

Community activist Paul Nolan, said: "It is not surprising, but it is disappointing. It is benefiting a few people and we are glad, but by and large this is just a scheme for investors to make money."

Mr Nolan said he had heard of some properties being rented out for up to 850 a month.

As part of the development's affordable housing requirement, 12 of the properties will be available for rent from Castle Rock Edinvar Housing Association from early next year.

Through the housing association, people will be able to rent new one-bedroom flats for 49 per week, with two-bedroom from 54 per week, three-bedroom from 62 per week and a four-bedroom property at 72 per week. Private landlords are charging much more.

The two-bedroom flats are being marketed privately from 600 per month, with three bedroom semi-detached homes being rented out from 750 per month.

Lee Murray is hoping to lease out his two bedroom, ground floor flat at Cakemuir Grove for 600 per month.

He explained: "I think people buying up a vast amount of properties would have a bearing on the area, but measures were put in place to prevent that."

The new two-bedroom properties were bought from 115,000, and three bedroom houses from 147,500. Two one-bedroom flats were sold for 85,000 each.

Teachers, students, hospital workers and bank employees were among the first to sign up.

Fears of buy-to-let investors taking over the development were raised when the properties were first put on the market. At the time, sales and marketing manager Jim Kelly said Parc was trying to attract young professional people and families, not buy-to-let investors, but he admitted it would be difficult to police.

A Parc spokesman said: "The directors of Parc are aware of the issues referred to."