The Scottish Futures Trust (SFT) has published a Prior Information Notice (PIN) in relation to a prospective Framework Agreement to be entered into by the new National Housing Trust (NHT).
The NHT is being established by the SFT to partner with local authorities and housing developers, in relation to facilitating provision of affordable, mid-market rental level homes throughout Scotland.
The NHT is an innovative funding initiative under which the Scottish Government will underwrite loans made by local authorities to special purpose vehicles.
Eighteen local authorities have expressed an interest in participating with SFT and the Scottish Government to procure "an innovative, value-for-money solution for the delivery of around 1000 to 2000 houses in areas where there is high demand for affordable housing at mid-market rents." The initiative is also intended to provide support and stimulation for the construction and house building sectors, which are suffering because of the squeeze on public finances.
Each selected project will have its own special purpose vehicle. The developer will be appointed not only to carry out the development, but also to provide property management and maintenance services to the prospective tenants. It is anticipated that developers will not provide this themselves, but will subcontract with suitable providers, e.g. housing associations. It is intended that the initial service delivery period will be five to ten years. The properties will be sold at the end of a five to ten-year rental period and the receipts will be used to repay local authorities first and private lenders second. Developers will get a capped return from any remaining sums. If there is still a surplus, the public sector will use it to develop additional affordable housing.
The NHT, which will kick-start activity on mothballed housing sites, is expected to leverage in about £130m of extra housing investment from the private sector.
The PIN is flagging up a forthcoming Industry Information Day, anticipated during the week beginning 19 April, at which interested builders, developers and providers of management and maintenance services would be wise to be represented to find out what opportunities there are for them.
You can find the PIN by clicking here, where you can register for attendance at the Information Day and request a copy of the NHT Initiative Briefing Paper. The Briefing Paper includes a list of key issues the SFT is seeking to consult industry on.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
