Date published: 27/10/2011
Miller Homes, the City of Edinburgh Council and Scottish Futures’ Trust (SFT) today launched a new limited liability partnership (LLP) as part of the National Housing Trust’s initiative (NHT), aimed at fast-tracking the delivery of new homes available for mid-market rental throughout Scotland.
Through the initiative, the NHT’s goal is to make more homes available at affordable rents in areas where demand is currently outstripping availability. In addition, it enables councils and developers to come together to kickstart construction on sites that might otherwise have taken a longer time to get underway, safeguarding jobs in the housebuilding industry. Edinburgh is suffering a chronic shortage of affordable housing and is one of the Government’s target areas for accelerated affordable housing delivery.
The partnership will see Miller Homes commence work on 89 new homes at its Varcity North development before the end of 2011. Once completed, the LLP will let the one, two and three bedroom apartments to employed tenants, predominantly key workers struggling to get their way on to the property ladder or to afford full market rents.
The LLP will use a managing agent, Lothian Homes, to manage the completed properties, identify potential tenants and manage the rentals over the contract term. Under the initiative homes must be available to rent over a 5 – 10 year period, following which, tenants will have the opportunity to purchase their house at the market value or to move on. Should tenants not select to buy, the LLP will sell the property on the open market.
David Knight, Managing Director, Miller Homes, Scotland:
“Miller Homes is delighted to participate in this unique and innovative means of addressing the shortfall in new affordable homes in the city. The financial model of the partnership between SFT, the local authority and ourselves will see these homes available for rent by mid-2013. This initiative also places considerably less reliance on the public purse for the delivery of affordable housing in the city.
“The homes will be developed to Miller Homes’ usual high standards in terms of the quality of the build, fixtures and fittings and we’ve worked very closely with the NHT and Council to secure the necessary consents to proceed. We welcome the pace at which they, and other key stakeholders, have worked to secure this initiative for Edinburgh and to drive it forward.
“At such a challenging time for the public and private sectors, it is welcome that Government recognises the important role that the private sector can play in supporting local government meet its obligations in terms of affordable housing.
”In addition to providing affordable rents for key workers, enabling them to live in the city, the initiative also safeguards employment within the housebuilding industry. Both of which provide the potential to deliver further economic benefits for Edinburgh.”
Councillor Paul Edie, Housing Leader for the City of Edinburgh Council, said:
“I’m delighted that Edinburgh has secured another contract for building more affordable homes in the Capital.
“The National Housing Trust initiative is an innovative way of tackling the shortage of affordable homes in Edinburgh and I am really excited with this new partnership with Miller Homes.
“This will bring forward another significant housing development in the city - just one of a number of innovative ways we have been increasing the number of badly-needed homes in the city.”
Miller Homes purchased the Varcity North site as part of a larger transaction from Telford College, which comprised three campuses (Telford South, Telford West and Telford North). The development of Telford West campus for Home Scotland Housing Association (40 affordable dwellings) was completed last year on time and on budget. Telford South, marketed as Varcity South, has now become one of the city’s, and Miller Homes’, most popular new build sales outlets. The last campus, now known as Varcity North, comprises 327 apartments within five new build blocks and a converted listed building. The apartments under the initiative comprise 89 apartments built over two new blocks.
Notes to Editors
1. Miller Homes, CEC and SFT established a Special Projects Vehicle (SPV) under the NHT initiative which, in this instance, is an LLP. When the 89 units are completed and ready for handover, they will then be sold into the LLP. The LLP will fund the acquisition with 70% debt from the local authority (via the Public Works Loan Board), 5 % debt and 25% equity from Miller Homes.
2. The completed plots remain as mid-market rental properties for between five and 10 years. After year five and before year 10, all 89 properties will be sold on the open market (potentially to existing tenants) for market value. Any residual profit (up to a capped Internal Rate of Return) after repayment of loans would be paid to Miller Homes.
3. Miller Homes is the UK’s largest privately-owned house builder and part of The Miller Group. Established in 1935, Miller Homes has built over 100,000 homes across the UK and has eight operating regions – Scotland East, Scotland West, North East, North West, Yorkshire, East Midlands, West Midlands and Southern.
Name: Jacqui Low
Phone: 0131 554 1230