Scottish Government commits £40 million for investment in Allia charitable bonds

£15 million increase to further support the development of affordable housing in Scotland

The Scottish Government has today officially announced an increase in its budget for investment in Allia charitable bonds in this next financial year to £40m. Allia’s successful programme uses Scottish Government funding to provide loans and grants to Scottish housing associations, and has to date supported the development of more than 1,000 new affordable homes.

The 2018/19 budget for investment in charitable bonds is increasing by an extra £15 million to £40 million. The announcement was made today by Housing Minister Kevin Stewart (pictured) on a visit to Kingdom Housing Association’s completed regeneration project in Kincardine, which was partly funded by a loan from Allia in 2015.

Housing Minister, Kevin Stewart said: “We are always looking at ways we can increase the supply of affordable housing and support developers, housing associations and councils get new projects off the ground. Part of our pledge to deliver 50,000 affordable homes is to make the most of existing public funds and secure additional private sector investment. 

“We are the only government in the UK to invest in charitable bonds. The interest we receive from the bonds is given to social housing providers and is another important step towards achieving our target for affordable homes.”

Phil Caroe, Director of Social Finance (pictured), Allia, said:

“Allia’s charitable bond programme with Scottish Government has been a great success over the last three years, offering a unique source of finance that is supporting new developments around the country.

“We’re delighted that the Scottish Government is now increasing its funding for this programme, which will result in even more people in Scotland being able to live in an affordable home.”

Bill Banks, Chief Executive, Kingdom Housing Association (pictured) said:

‘‘At Kingdom we are progressing an increased development programme, which will contribute to the 50,000 target and we are aiming to optimise the range of funding sources available to support and deliver the programme.

“The Allia charitable bond funding of £15.25 million drawn by Kingdom so far is a welcomed addition to this portfolio supporting delivery of up to 293 affordable homes.’

Left to right: Nick Pollard (Director of Corporate Support Services, Kingdom Housing Association), Phil Caroe (Director of Social Finance, Allia), Bill Banks (Chief Executive, Kingdom Housing Association), Kevin Stewart MSP (Minister for Local Government and Housing), Lachie MacDonald (Chief Executive, Lochalsh and Skye Housing Association), Angela Linton (Chief Executive, Hillcrest Housing Association), Hugh Carr (Director of Finance, Dumfries and Galloway Housing Partnership)

NOTES

The Scottish Government’s investment in Allia’s charitable bonds has to date provided loans to 11 housing associations across Scotland.  The interest on these loans will create a grant fund of £20 million to support the delivery of houses for those on the lowest incomes.

The Kincardine development by Kingdom Housing Association includes 49 mixed tenure affordable homes, partly funded from charitable bond loans.