Scottish Government sets up £10 million loan fund to kick-start housing development

A NEW £10 million loan fund will unblock a pipeline of housing developments by funding infrastructure work.

The Scottish Government has responded to calls from the industry to help housing companies, unable to secure private sector finance, to invest in the infrastructure needed for projects to go ahead.

The Housebuilding Infrastructure Loans Fund will offer repayable loans to support physical infrastructure such as roads, sewers, decontamination, flood remediation and demolition.

The cabinet secretary for infrastructure and capital investment, Alex Neil, said: "The housebuilding industry has made clear that some major developments in Scotland have stalled in the current tough financial climate as the funding to build the necessary infrastructure just has not been available.

"We have listened carefully and this fund is designed to specifically target that problem and kick-start a range of developments in urban and rural communities across Scotland.

"Loans will be for companies to build the roads or lay the pipes and cables that mean housing developments can go ahead.

"Unlocking development in this way will deliver a major boost to the Scottish economy worth far in advance of the initial £10m investment and supporting many construction industry jobs."

Jonathan Fair, chief executive of industry body Homes for Scotland, said: "With the number of new homes continuing to languish at stubbornly low levels, this announcement demonstrates that the Scottish Government is prepared to grasp the nettle in terms of the barriers to development in the current economic environment and begin to help break them down with actions to unlock housing construction."

Information about how to apply to the fund is available at www.scotland.gov.uk/hilf