The innovative approach follows a commitment in the local authority’s Strategic Infrastructure Plan (SIP) to build 2,030 homes by 2017.

Councillors agreed to name Places for People Group Limited as the successful consortium that, subject to the statutory standstill period and contract award, will be appointed on a partnership basis to help the city council meet the housing objectives contained within the SIP.

The new model is the first of its kind launched by a local authority in Scotland, and will ensure that new affordable housing will not be reliant on public funding and can be developed to meet need and demand.

A shortage of housing has been identified as a Scotland-wide issue, but the lack of low-cost homes is particularly acute in the north-east, where the high cost of living has presented problems for the public sector in recruiting and retaining key workers.

Aberdeen City Council leader, Councillor Jenny Laing, said: “We have recognised for some time that the availability of affordable housing in Aberdeen was a significant problem that has to be addressed in order for this area to continue to prosper.

“Our Strategic Infrastructure Plan identified a number of key goals to allow us to build on the positive economic position of the city, one of which was to deliver a step change in the supply of housing.

“The current route for the delivery of affordable housing is not able to keep pace with the need and demand in Aberdeen, while there is a heavy reliance on the private sector incorporating 25 per cent affordable housing within their developments, which is not always delivered on site.

“Today’s decision will not only help to meet our affordable housing requirements, but will also provide significant financial benefits to the council.”

Places for People Group Ltd, which is one of the largest property, leisure management, development and regeneration companies in the UK, will bring experience in development and housing management to minimise the cost and increase the speed of construction.

The new partnership will build, own and manage housing for rent targeted at a range of needs, including key workers on modest incomes.

The objective is to develop an initial 1,000 affordable homes and 1,000 private development homes, with the potential for a further 1,000 properties.

The initial investment for affordable housing and private development is £300m.

In the long-term, the strategy is to continue to develop sites, so the level of investment in the project will increase.

The partnership will develop council-owned sites with the council receiving a 50 per cent share of the development profit, in addition to payment for the land value.

There will be eight sites initially committed as part of the project. The first sites to be transferred will be Summerhill and East Woodcroft.

This project will support, and is in addition to, the council’s own building programme which, at present, includes 179 units split between developments at the former Smithfield Primary School site and at Manor Walk.

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