A MILLION-pound project to create more student accommodation in Durham city centre has begun.

Developer Angel Homes is converting the space above Yates Wine Bar and the British Heart Foundation charity shop, at 80-83 North Road, into four six-bedroom student apartments.

The fully fitted apartments, on the upper two floors of the three-storey, 15,000sq ft property, will include bedrooms with en suite bathrooms, plus communal lounges and kitchens.

The scheme was made possible by a seven-figure loan from Lloyds TSB Commercial Banking, supported from the Government-backed Funding for Lending Scheme (FLS) – set up last August to provide banks with cheap loans on the condition they pass on the money to small businesses.

Angel Homes has been managing residential and commercial properties around Durham since 2003.

Founder and owner Andrew Ward said: “There’s constant demand for high quality student accommodation in Durham and the new property is in a great location, being close to the university, the train station and the shops.”

Mr Ward added: “We bought our first investment property ten years ago as a bit of a hobby, but it has steadily grown into a full-time business in its own right, and one which we thoroughly enjoy.

“We are already looking at other opportunities to develop unused buildings around the city as well as improving our current portfolio further.”

Angel Homes was granted planning permission to convert the space into student accommodation by Durham County Council officials acting under delegated powers last month.

Student accommodation has been a contentious issue in Durham for many years. Recently, Connislow has been given the go-ahead to build 223 student flats on the former Fred Henderson garage on Ainsley Street and Banks Property was granted planning permission for a £200m housing project, including accommodation for 1,000 students, on Mount Oswald golf course.

Durham University is also in talks to buy the Three Tuns Hotel, on New Elvet, although it has not disclosed for what purpose.

Durham City MP Roberta Blackman-Woods has called on Durham County Council to impose a cap on homes in multiple occupancy (HMOs), to ensure “balanced communities” in the city.