£50m for charitable bonds

Posted On: 17th March 2016

£50m of Scottish Government investment in charitable bonds over the next two years will provide support for almost 1,000 new homes.Government Opportunities

Four housing associations will benefit from this year’s £25m bonds – Kingdom in Fife, Eildon in the Borders, Orkney and Ayrshire. A further £25m is earmarked for 2016-17.

The bonds, issued by Allia, a social investment charity, provide a new source of finance for housing associations to build around 750 new affordable homes, while interest on the loans provide grants for 200 social homes.

This year’s £25.6m investment has resulted in £18.9m in loans for new affordable homes, and over £6.7m grant funding, to be allocated by the Scottish Government, to build new homes for social rent.

Speaking after visiting a Kingdom Housing Association development near Dunfermline, Social Justice Secretary Alex Neil said:

“Innovative financing schemes such as charitable bonds will play a major role in our approach to supporting a major expansion in housing supply over the next parliamentary term.

“Between 2013 and end of March next year we will have supported the building of more than 1,000 homes by investing £62m in charitable bonds, the only Government in the UK to do so. The bonds are ethical financial products that are providing housing associations in Scotland with easily accessible development finance for new affordable homes.

“I am delighted that these four housing associations have benefited from the bond programme and I look forward to more development finance for other housing associations over the year.

“We have now exceeded our target of delivering 30,000 affordable homes in this Parliamentary term, including nearly 21,000 social homes. Our ambitions go further though, which is why we have committed to deliver a further 35,000 social homes as part of our plans to build 50,000 more affordable homes over the next five years, backed up with investment of more than £3bn.”

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