Mid-market rent milestone as arms length organisation set up

A MILESTONE has been reached in Shetland Islands Council’s plans for a “mid-market rent” housing scheme after documents were signed off for the creation of a new arms length external organisation (ALEO).

It is hoped that once the finishing touches are completed, six newly built properties on North Road in Lerwick could be allocated for tenancy in January.

In October councillors approved the SIC making a new ALEO to meet rules around local authorities entering the private rental market.

A budget of £1.42 million was approved to provide grant funding for the ALEO to buy and set-up the six one-bedroom homes.

Mid-market rent has not been used locally before and it could potentially provide a housing solution for people who tend to be priced out of the buying market, but are unable to demonstrate the level of housing need to secure a social rent.

It also aims to help those who struggle with the often expensive cost of private rent. The proposed mid market rent is £750 per month.

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SIC chief executive Maggie Sandison said the ALEO was formally set up on Tuesday.

She highlighted that the organisation does not employ anybody, with existing council staff due to oversee it.

“We’ve only set it up because we can’t do mid-market rent as a social landlord,” she said.

Meanwhile development director Neil Grant said some other local authorities have been in touch with the SIC to learn more about the project.

He told a meeting of the SIC’s development committee on Wednesday that he felt it was “hugely important for Shetland going forward”.