Social housing in Shetland has received a boost of £1.3 million thanks to Scottish Government investment in charitable bonds. The money will go towards new homes to rent.
Issued by social investment charity Allia as part of its More Homes Scotland approach, the bonds provide loans to housing associations and allow the interest to be made immediately available as charitable donations.
A total of £1.3 million has been made available to Hjaltland Housing Associaton to build homes in Lerwick, Scalloway and Tingwall. The interest on this loan totalling £530,000 will be used by the Scottish Government’s Affordable Housing Supply Programme for the construction of new social housing.
Housing Minister Kevin Stewart said: “I’m sure this will be very welcome news for people in Shetland. The latest round of funding means that we have now invested a total of £70 million in nine charitable bonds, providing an innovative source of finance for housing associations to support the development of 935 homes for social and mid-market rent across the country.
“We have committed to deliver 50,000 new affordable homes during the term of this parliament and this is yet another important step towards this target.”
Hjaltland’s head of finance and corporate services Susan Gray said: “Hjaltland Housing Association is very pleased to have secured £1.325m of loan finance from the Scottish Government funded Allia bond programme. This ensures that our on-going development programme can continue to increase the supply of much needed affordable homes for families in Shetland.
“This particular new funding stream will assist in the development of additional rented properties in Tingwall, Scalloway and Lerwick. The innovative scheme has been straightforward to put in place and has minimised the up-front arrangement costs and security requirements of the loan.”
Allia’s director of impact finance Phil Caroe said: “Allia is proud to have worked in partnership with the Scottish Government to support the creation of over 900 affordable new homes across Scotland. The charitable bonds programme has been a great success story of using finance for social good, and we’re pleased to see that the Government’s leading example is now attracting interest from other parts of the UK.”
The Charitable Bonds model was developed by Allia, a Cambridge-based social investment charity, which manages the Scottish Government’s Charitable Bonds investments.
The bonds are part of More Homes Scotland, which is intended to support the increase in the supply of homes across all tenures.
Nine housing associations have benefited from Charitable Bond funding, covering Edinburgh and Glasgow, the Borders and the Northern Isles, and the Highlands and Lowlands.