Argyll Community Housing Association (ACHA) and Argyll and Bute Council have agreed the terms of a housing loan facility to support the association’s new build housing development programme.
This first facility agreed between Argyll and Bute Council and ACHA will see a loan of £2.3million provided from the Council’s Strategic Housing Fund on the principle of a 25 year capital and interest mortgage. This will go directly towards supporting the construction of ACHA’s 40 new homes for rent at Glenshellach in Oban.
The housing development at Glenshellach in Oban will be available for let from November 2014 and will assist in tackling the waiting list of over 600 in the Oban area.
The construct of housing association new build funding normally involves a package made up of Scottish Government and local authority grants supported by private finance procured by the association by way of a loan from the traditional banking sector. In the current climate, post credit-crunch, bank finance is not as readily available on favourable terms as it once was. A few local authorities in Scotland, including Argyll and Bute Council, have explored ways to secure loan funding to support affordable housing development through their access to the Public Works Loan Board and designated housing reserves.
Commenting after the conclusion of the agreement Alastair MacGregor, ACHA’s Chief Executive said, “I am delighted that the work on this new initiative between the Council and ACHA has resulted in a financial facility being provided on favourable terms through the Local Authority’s powers. In basic terms it allows ACHA to build much needed homes in Oban through a loan from its strategic housing partner, Argyll and Bute Council.
“I would like to thank the council for the innovation they have shown within their existing powers to provide housing mortgage finance to supplement the grants ACHA has been able to secure from the Scottish Government.”
Councillor Robin Currie, Argyll and Bute’s Policy Lead for Strategic Housing added, “In order to sustain the affordable housing development programme across Argyll and Bute the council has made provision for £5m lending from our reserves to registered Housing Association partners. We have recognised the challenges faced by the RSL sector in raising private finance in the current economic climate and we took a decision in 2012 to earmark reserves for this purpose."