Government unveils £50m package to boost housebuilding

Alex Neil meets apprentices at the Kilsyth development
Alex Neil meets apprentices at the Kilsyth development

A new £50 million infrastructure fund which aims to speed up the construction of thousands of new affordable and private homes has been unveiled by the Scottish Government.

The flexible grant and loan fund will help unlock strategic housing sites of importance to local authorities to increase the scale of housing delivery.

It follows the announcement of a £25m Rural Housing Fund to help bring an estimated 500 new affordable homes specifically to rural areas.

The announcements form part of a package of measures called More Homes Scotland to support the increase in supply of homes across all tenures.

Key to this overall approach is the Scottish Government’s five year commitment to delivering at least 50,000 affordable homes, 70 per cent for social rent, backed by investment of over £3 billion.

Building on the success of the National Housing Trust new financing mechanisms are also being explored to expand mid-market rent developments.

All planning appeals for housing proposals of more than 100 units will now be recalled to ensure housing land supply issues are given ministerial scrutiny.

Announcing the infrastructure fund during a visit to Clyde Valley Housing Association’s new development in Kilsyth, social justice secretary Alex Neil said the move underlines the government’s determination to increase the pace and scale of development to deliver more homes across all tenures.

He said: “The £50m infrastructure fund will help unblock sites that are strategically important to councils and that have the potential to accelerate the delivery of thousands of new homes across the country.

“To make that happen we will team up with public and private sector bodies to tackle complex development, financing, infrastructure and planning issues impeding housing supply.

“We will also explore more innovative financing to build more homes for mid-market rent.

“We have listened to our partners and are putting in place measures to support the increase in the supply of homes across all tenures, support jobs in the construction industry, and encourage inclusive growth in the wider economy.”

Mr Neil is expected to set out further details of the initiative when he speaks at the opening of CIH Scotland’s 2016 Annual Conference in Edinburgh tomorrow.

CIH Scotland chair and chief executive of Port of Leith Housing Association, Keith Anderson, said: “We welcome the launch of More Homes Scotland as putting housing firmly at the top of the political agenda. We look forward to hearing more about the detail of these proposals when Alex Neil opens our 2016 Annual Conference this week. Our initial reaction is that we are encouraged that this announcement includes a fresh approach to the single biggest issue facing the sector – namely how we can increase the supply of housing across all tenures to meet demand.

“The initiative also reaffirms the Scottish Government’s commitment to increase the level of grant subsidy per unit of affordable housing from April this year, in line with the recommendations of the 2015 Subsidy Working Group of which CIH Scotland was an active participant – and which we have also strongly welcomed. There are also some potentially interesting proposals to create an infrastructure fund as a mechanism for helping to deliver more new homes across all tenures more quickly which is an issue we have campaigned on for some time.”

Keith Anderson added: “Taken together, these proposals are very welcome in moving the housing debate beyond headline targets towards addressing the practical measures needed for those targets to be achieved.”

Homes for Scotland said the new infrastructure loan fund is a significant step to increasing the supply of homes.

Nicola Barclay, chief executive of the trade body Homes for Scotland, said: “New homes are not built in isolation. They need to be connected to existing facilities such as roads, water and drainage. New residents also need to have access to local services like schools, medical facilities and public transport.

“The challenge for home builders, however, is that they are often asked to make large financial contributions to meet these costs up-front, before they have begun to build and sell the new homes. This can present cash-flow issues and even make some developments unviable.

“We keenly await further details on today’s announcement but this national recognition of what is a massive barrier to the building of much needed new homes of all tenures is welcomed. Together with the ‘More Homes Scotland’ programme the Scottish Government also unveiled today, it represents a significant step forward in helping to increase supply and to meet the diverse housing needs and aspirations of our growing population.”

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