Affordable home building in Edinburgh falls by 60% in five years

New figures show that between 1999 and 2004, the number of new houses being built for rent by Edinburgh City Council or housing associations declined by 60 per cent.

Just 228 such homes were built in the Capital in 2004 despite housing chiefs calculating that 12,000 affordable homes are needed over the next decade.

The shortage was today blamed on the formula used by the Scottish Executive to calculate funding. Edinburgh has traditionally missed out on housing subsidies because the cash is linked to deprivation and levels of poverty are not considered to be as high as in other Scots cities.

City housing leader Sheila Gilmore believes the figures reflect the declining level of grants, but said the situation was getting better.

She said: "These figures reflect a period when the availability of grants to Edinburgh was lower than it is now. There are a lot more sites [being built upon] this year than last year and that should show through as completions next year."

Until 2003, the amount of cash awarded to the council by the Scottish Executive declined as the Capital's economy boomed.

However, the council's plan to transfer its housing stock into the control of a housing association triggered a 30 million windfall which was paid out over the past two years.

A further 15m has now been pledged over the next year but future funding is uncertain after transfer of the city's 23,000 council homes to a housing association was rejected by council tenants.

The funding means that 500 homes a year will now be built - only half of what council bosses say is needed. The Scottish Executive is now re-evaluating how its grants are awarded and the council is set to lobby for reform.

Cllr Gilmore said: "At the moment, what we have had in the last couple of years has been a very useful addition to what we have had before.

"We really need to have that continued. At the moment the Scottish Executive is consulting on a new way of dividing up the housing association grant so we will be putting in a very strong submission to say that we should break away from this deprivation-dominated criterion and move for one that looks at the need."

The council wants to force builders of new housing developments in Edinburgh to set aside a quarter of homes for people struggling to buy property or find an affordable home to rent.

It is hoped that this will help attract badly-needed workers such as nurses and teachers who are currently deterred from moving to the Capital because of the high property prices.

The cost of the average city centre home rose by almost 20 per cent in the first quarter of this year compared with the same period last year. The average property in the heart of Edinburgh now costs 225,000.

Lothians MSP Kenny MacAskill said the lack of affordable housing had a detrimental effect on the city economy. "

Lower-paid workers like nurses and bus drivers can't afford to live in the city," he said.