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Scottish £300m housing scheme attracts local and national firms

Both local and national housebuilders are showing an interest in a Scottish housing initiative worth up to £300 million.

A contract notice is expected in June inviting bidders for the National Housing Trust, devised by the Scottish Futures Trust.

The initiative will see local authorities join with developers to make more new affordable homes available for rent in areas with high demand.

The SFT has already spoken with a host of national housing firms including Barratt, Kier, Taylor Wimpey and Persimmon about participating in the trust.

Scottish housebuilders - including Miller Homes, Stewart Milne, Roberston, CCG Homes, Ogilvie, Dawn Homes and Cruden Homes - also came out in force for an information day held by the SFT last month.

Morgan Sindall’s social housing arm Lovell, Rok, Northern Irish contractor Graham and Balfour Beatty subsidiary Mansell also expressed their interest in the NHT, which it is hoped will generate up to 2,000 homes.

Eighteen local authorities, including Aberdeen, Edinburgh and Glasgow City councils, have signed up to work with the SFT and the Scottish Government in delivering the initiative, which is underpinned by an innovative financial model.

The scheme will be jointly funded by participating local authorities and developers, with the Scottish Government underwriting any local authority loans to the initiative.

The developers will build the houses and then form special purpose vehicles with the councils involved to jointly finance the acquisition of the homes on each project. The councils will take a 65 per cent stake and the developer will cover the remainder.

The SPV will then let the homes to tenants for between five and 10 years before selling them off.

SFT chief executive Barry White told Construction News that 2,000 homes was just a target and the scheme could be extended beyond that or even include a second phase.

He added: “The benefit for developers is if they have a site for 40 units and they can get 20 of the units done this way, it may make construction of the other infrastructure more viable.

“The response by developers has been welcoming, but some have said that it’s not for them.

“There are some in the private sector who hanker for the good old days but this is the vanguard of many new initiatives.”