Social investment charity Allia is helping the Scottish Government fund almost 1,000 new homes over the next two years by helping it invest £50m in charitable bonds.
The bonds, issued by Allia, provide a new source of finance for housing associations to build around 750 new affordable homes, while interest on the loans provides grants for 200 social homes.
The interest on the charitable bonds loans is made immediately available by Allia as charitable donations for the Scottish Government to direct to charities. In this programme, the Scottish Government treats it as a social housing grant, and accounts for it through the Affordable Housing Supply Programme.
This year’s £25.6m investment has resulted in £18.9m in loans for new affordable homes, and over £6.7m in grant funding, to be allocated by the Scottish Government, to build new homes for social rent.
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.
Phil Caroe, Allia director of social finance said:
“The four loans made by Allia with Scottish Government’s investment will have significant benefit for communities across the country. We’re seeing strong demand already from potential borrowers for next financial year and will be inviting other investors to come alongside the Government to support the development of more affordable housing in Scotland.”