The Cabinet Secretary for Social Justice, Communities and Pensioners’ Rights, Alex Neil, visited the development by Castle Rock Edinvar Housing Association and Places for People, by the Wester Hailes Healthy Living Centre, today to promote the Scottish Government’s plans to create more affordable housing.
The Cabinet Secretary spoke to some of the people working on the site before helping to lay a brick. He also spoke with manager of WHALE Arts, Allan Farmer, about the work done by WHALE involving local children in the development of the development, including site visits and art projects.
The Scottish Government is investing £25 million next year in charitable bonds that could lead to up to 450 affordable homes being built.
The money, from the UK Government’s ‘financial transactions’ funding, can only be used as loan and equity investment but, through a charitable bond model, the Scottish Government has pioneered an innovative way of creating grant to support affordable housing in Scotland.
The charitable bond enables the Government to make an ethical investment that brings forward future interest in an upfront donation for affordable housing by providing a loan to a social housing provider that is repaid in ten years.
Through the bonds, £7.3 million of grant subsidy will be generated to deliver more than 125 social rented units, and £17.7 million of loan funding will be provided to support housing associations build over 300 social homes in Scotland.
The investment is part of a £200 million increase in next year’s Scottish Government housing supply budget. That increase is forecast to support at least 6,500 jobs and lever in significant private investment to deliver £600 million of total investment.
Cabinet Secretary Alex 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 i supporting our construction industry.
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 teh loadn to support the provision of much-needed affordable housing across the country.
Through our partners in councils and housing associations, we have now delivered more than 21,000 affordable homes and are two-thirds of teh way towards our target of 30,000.
We have boosted housign 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 avaliable to develop the use of the charitable bond model in Scotland, to increase finance avaliable 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.