Pension Funds Encouraged To Invest In Housing

15th March 2011

Investment sought to build more affordable homes

Two prominent pension funds are in talks with the Scottish Government about investment in affordable housing in Scotland, it emerged today.

Strathclyde Pension Fund and Calmac Pension Fund are amongst the investors with whom the Government is having early discussions about future investment options.

The Scottish Government is seeking to maximise supply through increased efficiency, greater leverage and encouraging bold, innovative approaches, such as tapping into pension funds and other institutional investment.

Housing Associations are already actively involved in new funding models such as the National Housing Trust, securing funding from sources such as the European Investment Bank, bond finance and devising shared equity schemes with house builders.

The 50 million pound Innovation and Investment Fund is also expected to help unlock new funding and delivery models.

There are more than 200 housing associations in Scotland, managing assets of 8 billion pounds and with an annual rental income of more than 900 million pounds.

Minister for Housing and Communities Alex Neil said:

"I am encouraged by the willingness of pension funds like 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."