Council to buy unsold new homes

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Edinburgh councillors are considering buying new city homes which developers fail to sell so they can make them available for rent.

The idea is part of a regeneration plan for the city which is to be approved by the council on Thursday.

It comes as city developer Gregor Shore said it had gone into administration leaving 120 jobs under threat.

It is one of the main property companies building flats on Edinburgh's waterfront.

The local authority has proposed wide ranging measures to try and ensure the city has a "soft landing" in the current economic downturn.

Key among these is a plan to rescue the struggling housing sector.

It wants to buy homes from struggling property developers at a favourable rate before putting them up for rent.

The council also wants to provide mortgages to first time buyers and key workers, so it could offer more flexible help if homeowners then get into financial difficulty.

The council said it had the financial muscle to afford these measures, and putting them into place would be vital to help the city beat the worst of the credit crunch.

The plan proposes measures towards:<ul class="bulletList"><li>Securing increased government investment for affordable housing in the city</li><li>Acquiring 'unsellable' homes from developers for a range of rent levels (social, market and 'mid' rent)</li><li>Developing a public sector-backed 'home loans' scheme to help first-time buyers and those who need to move</li><li>Stimulating £100m new investment in Edinburgh, with an innovation team to promote diversity away from existing key sectors</li><li>More support for businesses looking to expand existing operations or relocate to Edinburgh</li><li>Expanding the existing, and successful, range of programmes to get people back to work through training</li></ul>

'Extreme uncertainty'

Jenny Dawe, Edinburgh City Council leader, said: "This is a robust response to the new world we're in and I'm sure our proposals will receive cross-party support in the interests of Edinburgh.

"Nowhere is immune but our city has excellent strengths which put us in a good position.

"We are stepping up our efforts, but there is still much cause for long-term optimism."

John Reid and Patrick Lannagan of Deloitte and Touche were appointed joint administrators of Gregor Shore Limited on 14 October.

John Reid said: "The housing market is enduring a period of extreme instability and uncertainty.

"It is our intention to complete the company's major developments and sell the apartments in an orderly fashion.

"The company employs 120 staff at its Leith headquarters and on a number of its sites. Unfortunately, the administrators will be making a number of redundancies, the number of which has not yet been finalised."