A radical initiative with the potential to create at least 1000 new affordable homes for rent, a similar number of jobs, and stimulate Scotland’s house building industry, has been unveiled.

The Scottish Government and the Scottish Futures Trust have devised the National Housing Trust (NHT) initiative as a direct response to the economic downturn and the squeeze on public finances.

It will see local authorities join forces with housing developers to build and let houses in areas where there is high demand from people unable to afford to buy or rent a home at market prices.

Ten local authorities have already confirmed interest in the plan which will see the purchase of newly-built homes, with loans underwritten by the Scottish Government, and the houses then let to tenants for between five and 10 years.

The NHT, which will kick-start activity on mothballed housing sites, is expected to lever in around £130 million of extra housing investment.

Today the Scottish Futures Trust begins formal market testing of the scheme with a call to interested parties to note their interest and give feedback on the viability of the proposals.

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Barry White, SFT Chief Executive, said: "Delivering innovative financing solutions that offer value for money is a key role for SFT, particularly when public finances are becoming increasingly stretched.

"These proposals have been shaped though dialogue with local government, house building industry and the financial sector. I am confident that NHT will deliver affordable rented homes and give developers the opportunity to kick-start dormant projects."

Minister for Housing and Communities Alex Neil said: "Traditional methods of supplying housing need to change because of the scale of the new economic and financial challenges we all face.

"Scotland is spearheading the drive in the UK for alternative sources of funding and innovative housing delivery models. The NHT breaks new ground and has potential to significantly increase the supply of affordable homes in many parts of the country.

"I am pleased that local authorities, developers and banks have shown such interest in working with us to practically deliver new affordable homes and support economic recovery through the NHT approach."

Jonathan Fair, Chief Executive of Homes for Scotland, said: "This initiative is another example of the progressive thinking that is required in the new economic environment both public and private sectors are now having to operate in. It also demonstrates the potential of what could be achieved if all work together to deliver the new homes Scotland urgently needs."

Graeme Brown, Director Shelter Scotland added: "With pressure on housing investment set to increase it is imperative that we find new ways to build the homes Scotland needs. "This new initiative is one such opportunity that , if successful, has the potential to be rolled to provide much needed new homes for those in greatest need. "

The following Local Authorities have confirmed interest in the scheme: Aberdeen; Aberdeenshire; City of Edinburgh; Dundee; Glasgow, Stirling, East Dunbartonshire; East Lothian; East Renfrewshire; and West Lothian.

(GK/BMcC)