Millions locked up in UK pension funds could be the key to growth in Scotland’s house building sector, Deputy First Minister Nicola Sturgeon has said.
An expert group led by industry body Homes for Scotland will look at ways to attract additional finance to increase housing investment targeting pension funds and other institutions.
The project team will also identify and address any barriers to attracting this source of investment. This will involve engaging with house builders, investors and potential landlords to discuss ways to enable the delivery of rented accommodation across Scotland.
It is estimated that 465,000 new homes are needed by 2035 to cope with expected housing demand.
Industry leaders believe this source of investment could help expand Scotland’s rented sector and deliver new, high quality, homes at a significant scale.
The Scottish Government is backing the initiative with up to £70,000 and participating in the steering group, as a direct response to calls from the industry. Construction Scotland and Scottish Development International are contributing an additional £20,000 to support the project.
Ms Sturgeon said:
“The project will pave the way for the industry to capitalise on the opportunities to attract new sources of finance, boost the supply of housing in Scotland and support jobs.
“The Government is responding to an industry request. The potential prize, for what is relatively small amount of project funding involved, is that house builders will unlock significant levels of investment in housing for wider social and economic benefit.
“We recognise the role of the rented sector in meeting the diverse housing needs of Scottish communities and want to enable growth so we are delighted to be able to support the house building industry in this way.”
Homes for Scotland Chief Executive Philip Hogg said:
“We recognise the challenge involved but by engaging with house builders, investors and potential landlords to discuss ways of enabling the delivery of rented accommodation across Scotland, we will develop a better understanding of the hurdles that need to be overcome in order to bring parties from across all sectors and interests together to deliver the appropriate mix of new homes that Scotland needs.
“We would therefore urge interested organisations to contact Homes for Scotland for further information.”
Anne MacColl, Chief Executive of Scottish Development International said her organisation were “very pleased” to support the project and added:
“We are working with a number of potential International investors in this space and this initiative will be pivotal in helping us achieve the investment we need in this sector.”
Alastair Wallace of the Construction Scotland Industry Leadership Group said:
“Unlocking large scale housing investment is a key concern of the construction Industry, it’s a very important piece of work which has the potential to stimulate much needed construction activity and jobs, as well as address the growing need for good quality affordable homes across Scotland. It simply makes sense.”