£25m Holyrood pledge to create affordable housing

New Social Justice Secretary Alex Neil welcomed the deal. Picture: John Devlin

New Social Justice Secretary Alex Neil welcomed the deal. Picture: John Devlin

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SCOTTISH Government plans to invest £25 million in charitable bonds could help create hundreds of affordable new homes.

Social Justice Secretary Alex Neil said the deal is the “type of fresh thinking” that could boost the supply of low-cost homes.

Holyrood ministers invested £10 million last year in charitable bonds, with the cash from them supporting Castle Rock Edinvar housing association to build new properties.

As he visited a Castle Rock Edinvar development today, Mr Neil said a further £25 million would be invested next year.

The money from the UK Government can only be used as loan and equity investment, but through a charitable bond model the Scottish Government believes it has pioneered an innovative way of creating grant to support affordable housing.

Through the bonds, £7.3 million of grant subsidy will be generated to deliver some 125 social rented properties, and £17.7 million of loan funding will be provided to support housing associations build more than 300 new homes.

Mr Neil said: “In a fair and socially just society we want to make sure that everyone in Scotland has access to good quality housing that meets their needs.

“Charitable bonds represent the type of fresh thinking that is helping increase the supply of affordable homes and is supporting our construction industry.”

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He added: “Last year, with a £10 million investment, we became the only Government in the UK to invest in these bonds. The loan from that investment supported Castle Rock Edinvar to deliver quality, affordable homes.

“Next year, our £25 million investment will evolve our approach, using the financing model to direct the grant and the loan to support the provision of much-needed affordable housing across the country.”

Mr Neil said more than 21,000 affordable new homes had been built under the SNP, putting the Government “two-thirds of the way towards our target of 30,000”.

He added: “We have boosted housing supply budgets by investing £1.7 billion in affordable housing over the lifetime of this Parliament. Our house building rates, per head, continue to outperform other parts of the UK.”

Heather Macnaughton, head of community investment at Castle Rock Edinvar, said: “We are delighted that there is further funding being made available to develop the use of the charitable bond model in Scotland, to increase finance available for affordable housing.

“Continued financial innovation by the sector is required to maximise the return on the Scottish Government’s investment and deliver housing that is affordable to everyone.”

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