WORK on a historic set of properties has got under way in Dunbar.

The construction of 50 affordable rented homes in the town started today (Wednesday), with a unique finance model developed by East Lothian Council and partners which was agreed by the Scottish Government.

The new properties, which are expected to be ready by 2020, are the first in Scotland to be built without any Government subsidy.

Pupils from Dunbar Primary School were joined at the Hallhill site by Councillor Jim Goodfellow and representatives from Robertson Group and Ross Development and Renewables (RDR) – both of whom were instrumental in finalising the innovative funding mechanism – as well as investors from the Co-op Pension Fund.

East Lothian Council worked with Robertson Capital Projects (RCP) and RDR to create an innovative delivery and funding mechanism that would allow the homes to be delivered using the council’s long-term affordable rental income to underpin a private sector funding solution.

Fifty homes are being provided for rent at mid-market rates without subsidy, funded using private sector investment, while 10 will be for social rent, funded using the council’s capital budget with Scottish Government grant support.

All 50 properties will revert to council ownership at the end of the lease period at no cost to the council.

The first houses will be handed over in March for social rent.

These new homes will be available to qualifying tenants initially from the council’s waiting list at initial rents for a two-bedroom terrace home at £508 per month.

The remaining properties for mid-market rent will be handed over in tranches through 2019 and 2020 as development progresses.

Mr Goodfellow said: “I am delighted that East Lothian Council has been able to reach agreement with partners on this unique finance model, which means we are able to offer more social and mid-market rental properties in a key location next to good schools, public transport links, amenities and facilities, with a minimal capital outlay for the council.

“The fact that these homes will eventually revert to council ownership too means it’s a sustainable option for the long term, as well as providing security of tenancies for our residents.

“It’s a shining example of how working with partners can help shape our communities and give more access to affordable housing options.

“Since 2007, more than 1,500 new affordable homes have been delivered in East Lothian, of which more than 700 are new council homes.

“Seven-hundred have been delivered through our housing association partners, with the remaining 130 intermediate tenures such as discounted sale and mid-market rent delivered through other financial models.

“This project fits in perfectly with our Draft Strategic Housing Investment Plan, which sets out an ambition to deliver a further 1,000 new affordable homes.”

The innovative funding model allows the council to use funding support from Scottish Government to deliver much-needed new socially rented homes, with the private sector funding enabling mid-market rental homes in this case.

Neil McCormick, managing director, Robertson Capital Projects, said: “We have been working incredibly hard for the last two years to make this delivery and funding model a reality because we understood the need for private sector support in order for local authorities to meet their key housing targets.

“I am confident that it will be the first of many.

“We are deeply proud to have played such a significant role in what will be deemed as a game changer in the affordable rental housing market for many other local authorities across Scotland.”