PROPERTY experts today urged councillors to relax their rule that one quarter of all new homes built in Edinburgh are offered as "affordable" properties.
The city council was the first local authority in Scotland to stipulate how many properties must be low-cost or socially rented houses, and the policy has long been resented by some developers.
But industry experts today said the economic slowdown
means it is now starting to stifle investment in the Capital, with the credit crunch bringing the city's construction industry to a virtual standstill.
City housing leader Paul Edie said it is "misguided" to believe that scrapping the affordable housing quota will help kick-start the city's building programme.
Roy Durie, senior partner with Ryden property consultants, said: "Up until now, the council has relied heavily on its affordable housing policy, effectively requiring landowners to make available 25 per cent of their land free of charge to housing associations or registered social landlords. This slowed up the planning process considerably and, indeed, resulted in some developments not proceeding. This policy will have to be diluted."
A recent investigation by the Evening News found that work had started on only six of the 29 major developments in Edinburgh with detailed planning permission outstanding in September last year. Michael Halliday, associate director at property firm CB Richard Ellis in Edinburgh, urged a cut in the quota.
"Clearly, developers and investors are finding it very difficult due to the impact of the credit crunch and current market conditions, and as a result development is slowing in the city," he said. "In these challenging market conditions, it could be argued that the 25 per cent affordable housing policy acts as a barrier to development.
"A reduction in the percentage sought would help, but the council needs to balance that with the clear need to deliver more affordable housing for the city."
Jason Hogg, director of development land at property experts Jones Lang LaSalle, added: "The development world is tough enough as it is, without these requirements."
However, Allan Lundmark, director of planning at industry body Homes for Scotland, said: "With much new residential development effectively on hold as a result of the credit crunch, now is not the time for lengthy local authority policy reviews."
Senior councillors said there was enough land in the city to solve Edinburgh's housing crisis. They want the Scottish Government to provide enough money for registered social landlords and public bodies to provide the necessary 6677 homes.
Cllr Edie said: "I was very surprised to hear there are those who believe we should reduce the affordable housing component of new developments. Surely, considering the current economic climate, we should be building more homes for rent – as the likelihood of securing a mortgage grows smaller by the day."
The full article contains 473 words and appears in Edinburgh Evening News newspaper.
