A social housing bond company has said it expects to raise £200m to finance housing developments in Scotland.

Carduus says it is in talks with half of Scotland’s housing associations to refinance existing debt and raise further funds for development at rates below current bank lending availability.

Carduus managing director Brian Gilmour has estimated interest rates will be below 5% on a 30-year term.

"Even on a conservative estimate, every property built creates 2.6 jobs directly and indirectly," he said.

-- Advertisement --

"If we are looking at £200m being 200,000 houses, you are looking at between 4,000 and 5,000 jobs. What a brilliant kickstart."

Carduus also aims to raise £1bn of finance over the next three years. It estimates the social housing sector currently has £9.7bn of assets and an estimated £7bn liabilities.

Mr Gilmour said: "Government funding is reducing for housing associations and bank funding has virtually disappeared. Housing associations run on 30-year business models so our model works for them."

But he admitted the project to raise finance for Scottish housing associations has taken longer than initially expected and described the "natural conservativeness" of social housing firm boards.

He said: "One of our challenges is educating firms. It might sound too good to be true, but it actually is true."

(IT)