Scottish Government increases funding for affordable housing

The Scottish government has increased funding into a scheme to increase investment in affordable homes and deliver more housing.

The £22 million investment is part of Scotland's Charitable Bond Programme, and 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 Paul McLennan 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."

He added that while this has been a "successful" model, it is reliant on Financial Transaction funding from the UK government. 

"This funding, which is vital in housebuilding," he said, "has been cut by 62 per cent since 2022."

McLennan added: “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.”