Port of Leith Housing Association (PoLHA) is investing £55 million to build nearly 500 additional new homes in north Edinburgh area by 2020.

Chief executive Keith Anderson admits that beyond that date, the future of the development is unclear despite a rapidly increasing demand for homes.

The Association is Leith’s largest social landlord and currently manages over 2,700 properties.

Keith Anderson said: “Edinburgh continues to have the highest average house prices compared to other cities in Scotland and, combined with stagnating household incomes, is restricting the number of people from becoming home owners, increasing the demand for social housing and for mid market rented housing, as well as open market rented housing.”

In its new five year strategic plan, the Association sets out the challenge facing the city of Edinburgh in terms of the need to increase the supply of housing. The housing list has more than 26,000 registered applicants and demand for social housing remains very high with over 200 bids being received for each new vacancy arising over the past year. It is estimated that over 1,600 new affordable homes are needed each year for each of the next 10 years to resolve this problem.

Keith Anderson added: “Edinburgh has an acute need and demand for affordable housing now and over the next generation.

“Having explored, over the past three years, new ways to finance development with less reliance on public subsidy, we have come to the conclusion that there are no straightforward alternatives to the traditional mixed funding regime of public subsidy and private finance which will enable rents to remain affordable for people on below average incomes.

“The production of new mid market rented housing in the city has increased over the past two years requiring lower levels of public subsidy. However, it remains unclear whether the current level and volume of subsidy available will enable the delivery of the number of new additional social homes needing to be built.”

As well as investment in new properties, the Association plans to invest a further £8m in ensuring all its homes meet the required quality standards and including the new Energy Efficiency Standard by the required date of 2020.