A ground-breaking £300 million deal between Aberdeen City Council and a property development company will see 2,000 homes built across the city with potential for a further 1,000.
The council’s joint venture agreement with Places for People, which already owns or manages 10,000 properties in Scotland, is the developer’s largest to date north of the Border.
Places for People said the agreement provides a blueprint to show that new housing can be built without any government subsidy or cost to the taxpayer.
Under the agreement a limited liability partnership has been set up with the council and Places for People each taking a 50 per cent share. The partnership will build, own and manage a range of homes across eight sites in the city, and split an equal share of any development profits.
The terms of the deal will see the council transfer ownership of the development sites to the partnership organisation, receiving payment in the form of land receipts on the completion of each new development.
The deal will deliver 1,000 new affordable homes for rent, 1,000 new homes for private sale and the potential to create 1,000 further properties.
Places for People, which owns or manages some 152,000 properties across the UK, said it will use its experience in the development and management of housing to minimise costs and reduce project timescales in building the new homes.
The deal signed yesterday is the first time a Scottish local authority has created a 50/50 partnership with a developer which creates both homes for private sale and affordable housing where the rental asset is retained by the partnership.
David Cowans, group chief executive at Places for People, said: “This deal is transformational. Creating 1,000 new affordable homes for rent will help to transform Aberdeen and the lives of key workers such as nurses and teachers.
“This deal is also transformational for how new homes are delivered in Scotland. In order to tackle the housing shortage in Scotland and the rest of the UK, public and private sector organisations need to explore new models and new ways of working together.”
Aberdeen City Council leader Jenny Laing said: “These thousands of new homes will help to address a shortage of housing in Aberdeen, which has become a barrier to the continued economic growth of the region.”
Laing said the partnership was in addition to the council’s own building programme which has already delivered 1,081 affordable properties in the last four years.
Eight sites are initially committed for the partnership project including at Summerhill, three at Tillydrone, Craighill, East Woodcroft, Kincorth and Bucksburn Farm (Greenferns). The council’s strategic infrastructure plan includes a commitment to build 2,030 homes by 2017.
Places for People, which is headquartered in London but has a base in Edinburgh through Castle Rock Edinvar housing association which is part of the organisation, has assets in excess of £3.3 billion.