A £22 million investment has been made into a scheme to increase
investment in affordable homes and deliver more housing.
As part of Scotland's Charitable Bond Programme, the Scottish
Government has provided funding to issue two new bonds via
finance intermediary Allia to housing providers Link and Cairn
Housing Association to provide support for more than 150 new
homes.
The programme, which has been running since 2014, provides loans
to social landlords to construct new affordable homes, with the
interest being reinvested by the Scottish Government into the
affordable housing budget to support more homes for social rent.
This latest extension will see the total number of bonds issued
increased to 40 and a total investment of more than £482 million.
Housing Minister said:
“Tackling the housing emergency requires bold thinking and
investment in Charitable Bonds is another tool we can use to
increase investment in our affordable housing budget while also
allowing social landlords to access vital funding to build new
homes.
“This has been a successful model in the past but is reliant on
Financial Transaction funding from the UK Government. This
funding, which is vital in housebuilding, has been cut by 62%
since 2022.
“While we are demonstrating what we can do with the devolved
powers and levers we have, it is vital that the UK Government
reverses that cut so we can increase investment in the affordable
housebuilding sector.
“We have a strong track record in affordable housing with 133,000
homes delivered since 2007, 93,000 of which are for social rent.
However, tackling the housing emergency requires joint working
from the Scottish and UK Governments and local authorities.”
Peter Freer Director of Debt Capital Markets and Head of Allia
C&C's Scottish Office said:
“These two bond issues demonstrate the ongoing success of the
Charitable Bond programme. With the Scottish Government's
investment in the bonds, Allia has been able to provide Link with
additional funding to support its significant development
programme and make our first loan to Cairn Housing Association.
Both organisations are providing much-needed new affordable
homes, and we look forward to continuing our work with the
Scottish Government to create more positive impact across
Scotland.”
Background
The charitable bonds programme was created in response to demand
from housing associations for better access to appropriate
finance. It provides unsecured loans for up to 15 years.
Charitable bonds are an ethical investment product where the
margin usually paid as interest to the bond holder, tax, or
profit to shareholders, is released as grant funding.
- Link - bond value of £16,006,385
- Cairn Housing Association – bond value of £6,019,085
