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Cllr Catherine West boarded a digger to ceremoniously break the ground at the new development in Scholefield Road, Archway.
When finished the scheme will consist of 17 one, two and four bedroom homes in keeping with the surrounding Victorian buildings.
Cllr West said: “Everyone deserves a decent, secure, affordable home and I am delighted Islington and Shoreditch Housing Association is creating low cost new homes for people who live and work in Islington.”
The project should be finished by the spring of 2014.