Up to £16 million is available to build new 'affordable' homes in Borders, Fife and Shetland, Housing Minister Kevin Stewart has announced.

The funding boost is possible thanks to a Government investment in charitable bonds, which provide loans to housing associations and allows the interest to be made immediately available as charitable donations.

Social investment charity Allia, which issues the bonds, has allocated £5m each to Eildon Housing Association (HA) and Kingdom HA, with another £1.3 million to Hjaltland HA.

Interest generated by the loans (£4.7m) will be used by the Scottish Government's Affordable Housing Supply Programme to build new social housing.

So far, nine housing associations have benefited from Charitable Bond funding, covering Edinburgh and Glasgow, the Borders and the Northern Isles, and the Highlands and Lowlands. Three bonds have already been issued this financial year to Elderpark HA, Lochaber HA, and Dumfries and Galloway Housing Partnership.

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The bonds are part of More Homes Scotland, a Government initiative to support the increase in the supply of homes across all tenures.

Speaking during a visit to Kincardine, where new homes are being developed due to a development loan under last year's charitable bonds programme, Minister Stewart said: "I'm sure this will be very welcome news for people in Shetland, Fife and the Borders. It 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.

"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.”

Bill Banks, Chief Executive of Kingdom Housing Association, said: "Kingdom Housing Association is very pleased to again be working with Allia Impact Finance in terms of raising private finance for much needed new development of affordable housing in Fife.

"The key attraction for Kingdom Housing Association of the Allia Scottish Government bond is its simplicity in what is an ever more complex area of raising private finance. The new loan of £5 million provided by Allia will enable Kingdom to acquire, through off the shelf acquisition and new developments, a total of 98 new homes."

Phil Caroe, Director of Social Finance at Allia, said: "Allia is proud to have worked in partnership with 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."

(LM/CD)