Investment in bond scheme for affordable homes in Scotland reaches £500m

Funding for a Government scheme to boost the supply of affordable homes has topped £500 million – with Social Justice Secretary Shirley-Anne Somerville saying the cash shows ministers are “committed” to tackling Scotland’s housing emergency.

She spoke out as a further £24 million of cash was announced for the charitable bonds scheme, which was set up more than a decade ago in 2014.

Since then the scheme, which provides loans to housing associations so they can build new properties for rent, has helped deliver more than 4,000 homes.

With the interest from the loans reinvested as grants into the social rented sector, the initiative has generated a further £146 million, with this helping to provide an additional 1,300 homes.

The Social Justice Secretary hailed the scheme’s progress as she visited an affordable housing project in Rosewell, Midlothian.

There she confirmed investment will support the issuing of new bonds to three housing associations – with the Link Group, Kingdom Housing Association and Wheatley Group being provided with loan finance to build about 175 homes.

Ms Somerville said: “We need to use all the tools available to deliver more new affordable homes and help tackle the housing emergency.

“The charitable bonds programme has successfully supplemented investment in our affordable housing budget while also allowing social landlords to access additional borrowing to build much needed new homes.”

She added: “Taking our investment to more than £500 million demonstrates our commitment to continue that success and see more affordable homes built – building on the 4,000 already delivered through this scheme.

“We will also continue to support the delivery of social homes through the £768 million investment in affordable housing over the next financial year which will enable the delivery of at least 8,000 more homes, as set out in the Scottish Government’s Budget – an increase of more than £200 million.”

The Social Justice Secretary insisted: “The Scottish Government is committed to tackling the housing emergency – and while there is more to do, there is real progress being delivered.”

Sally Thomas, chief executive of the Scottish Federation of Housing Associations, said: “It’s never been more crucial that we deliver many more secure, warm and affordable homes. The charitable bonds scheme is an important part of doing so, and it’s great to see SFHA members receiving these funds to deliver the homes we desperately need.”

She added: “Social homes make lives and places better. As we move forward, working our way out of the housing emergency, continuing, consistent and multi-year government investment in our social homes will be essential – not only to provide the homes we need but also to tackle poverty and help us create a fairer Scotland.”