MacDonald welcomes more pension fund support for affordable housing investment
Wednesday, 16 March 2011 18:22
Councillor Angus MacDonald, SNP Candidate for Falkirk East has welcomed news that the Scottish Government is in talks with two additional prominent pension funds as it looks for investment to build more affordable homes.
Strathclyde Pension Fund and Calmac Pension Fund have been named as amongst the investors the government is in early stage talks with about future investment options. Falkirk Pension Fund, currently totalling £1 billion, of which Angus MacDonald is a trustee, have also been in early talks with the SNP Government
No figure on the proposed level of investment has been given to date, and the Scottish Government also said talks were at "a very early stage".
However it said there are at present around 200 Scottish housing associations managing assets of £8billion with an annual rental income of more than £900 million.
Minister for Housing and Communities, Alex Neil, said: "I am encouraged by the willingness of pension funds like Falkirk, Strathclyde, Calmac, and other institutions to discuss possible future investment in social and affordable housing.
"With the UK Government's planned cut in public spending expected to impact on the level of future investment, the financial pressures facing affordable housing provision are acute.
"That is why Scotland has taken a lead in the UK to look at new ways of funding the homes people need.
"There is a strong tradition of joint public and private investment for new build and maintaining the quality of housing stock."
Welcoming progress, Councillor Angus MacDonald said: “I am extremely pleased that this initiative is being progressed by our finance officers at Falkirk Council.
"We badly need more social housing in Falkirk district, and indeed the wider Forth Valley. This initiative ticks all the boxes, allowing construction of social housing and the resultant construction jobs it would bring, while providing the Falkirk Pension Fund with a guaranteed index-linked investment.
"Affordable housing is a low risk, ethical investment so in effect, everyone’s happy!
“While the SNP Government has provided grants to Falkirk Council to allow the construction of 130 flats in the district, there are around 8,000 applicants on the Council’s housing waiting list, so 20 new flats per year are not going to make up for the properties sold under the ‘Right to Buy’ legislation.
"This initiative would allow social landlords to construct properties when they are currently finding difficulty in securing funding from traditional sources such as our banks.
Housing associations are already looking at new funding models like the National Housing Trust (NHT) to fund the building of new housing stock.
The Scottish Government, through the Scottish Futures Trust, plans to offer a guarantee to councils to ensure they are able to repay any money they borrow to fund NHT schemes.
Funding is also being sourced through the European Investment Bank, bond finance and devising shared equity schemes with house builders.
The £50 million Innovation and Investment Fund is also expected to help unlock new funding and delivery models.