£38m homes plan at market to bear fruit

HUNDREDS of new affordable homes are to be built on the former site of Edinburgh's Fruitmarket under a new plan to get development moving.

Housing association Dunedin Canmore is planning the 38 million scheme for 380 homes at the Chesser Avenue site, which also used to be an Asda supermarket.

City leaders have hailed the move as a boost to the city's affordable housing targets.

It will use a new funding model where the city council guarantees Dunedin Canmore's bank loan for the scheme.

Previous plans for a 65m development of private homes collapsed when developer Applecross fell into administration.

Councillor Paul Edie, the city's housing leader, said: "It will help regenerate the area and bring investment in, while also being a contribution to the large number of affordable homes we need."

"The latest estimate is that we need 15,000 (homes] over ten years and developments like this will make a significant impact on that. It is an innovative funding model and an exciting project that requires further investigation."

The scheme would mainly include houses for private sale or "mid-market" rent homes, which are more expensive than social rents but typically around 50 per cent cheaper than private rents.

To secure funding, Dunedin Canmore needs to put down a 2.5m "guarantee". The council is proposing paying for it using ring-fenced housing funds made available by the Scottish Government.

The original plans for private homes were proposed in 2005 by Applerock – a joint venture between Applecross and Blackrock. Since Applecross went into administration, Blackrock has been working with the Royal Bank of Scotland Global Restructuring Group (GRG) to find a way of developing the site.

Under the new plans, Dunedin Canmore would buy any completed units and land at construction cost, with GRG retaining a share in all but 58 units.

Negotiations are under way to find a housebuilder for the first phase of the scheme, which will see 259 units built and up to 90 being sold on the open market.

It is thought around 380 jobs will be created in design and construction work relating to the project, while also testing the new investment model that could provide a new means of building affordable homes without the need for grant subsidy.

Mark Turley, the city council's director of services for communities, said: "The project will deliver much-needed affordable homes, regenerate a city centre neighbourhood, create jobs and support the local economy, in line with the council's economic resilience strategy.

Nobody at Dunedin Canmore was available for comment.