Government fund to tackle affordable housing shortage

Up to 6,500 jobs could be supported by the housing plan

The Scottish government has unveiled plans to tackle the "chronic shortage" of affordable housing.

Ministers say the £25m scheme could allow building to begin on up to 450 homes in the next year.

The money, from Westminster's financial transactions funding, can only be used as loan and equity investment.

But the Scottish government has pioneered a way of giving one-off grants to charities to support affordable housing.

Social Justice Secretary Alex Neil said the funding will deliver more than 125 social rented homes, and £17.7m of loan funding will be provided to help housing associations build over 300 social homes in Scotland.

The investment is part of a £200m increase in next year's Scottish government housing supply budget which could support at least 6,500 jobs

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."

'Boosted budgets'

He added: "Through our partners in councils and housing associations, we have now delivered more than 21,000 affordable homes and are two-thirds of the way towards our target of 30,000.

"We have boosted housing supply budgets by investing £1.7bn in affordable housing over the lifetime of this parliament. Our house building rates, per head, continue to outperform other parts of the UK."

Castle Rock Edinvar Housing Association received a charitable bond investment for a development in Edinburgh last year.

Spokeswoman Heather Macnaughton 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."

The Scottish Liberal Democrats said they had originally put forward the idea ahead of the Budget Bill discussions a year ago.

The party's housing spokesman Jim Hume said: "I am delighted that, one year on, the SNP government has listened to our sensible and innovative proposals to deliver more affordable homes.

"As a result of this dialogue between Liberal Democrats and the Scottish government hundreds more households in Scotland will have the opportunity to get on in life."