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  • Writer's pictureKenneth Gibson MSP

£40 million Charitable Bonds Funding for Affordable Homes

The £40 million of additional SNP Government investment in charitable bonds for 2019/20 is expected to generate £10 million of donations.

Charitable bonds are an ethical investment product where the margin usually paid as interest to the bond holder, tax, or profit to shareholders, is released as grant funding for a charity, on day one of the investment.

The charitable bonds programme was created by the SNP Government in 2015/16, in response to demand from housing associations for better access to appropriate finance. It provides unsecured loans for up to 15 years with no payments of interest or capital before maturity.

Allia Impact Finance undertook its first charitable bond with the Scottish Government in 2014, and in 2017 successfully tendered to manage the bonds until 2021.

Housing Minister Kevin Stewart MSP said:

“The SNP Government’s innovative use of charitable bonds is making a real contribution to the delivery of our target to deliver 50,000 affordable homes by March 2021. The interest on these loans enables us to create a grant fund to support the development of social rented homes in communities across Scotland.

“To date, the Government has invested £115 million in the charitable bonds programme which will provide development finance for over 1,000 affordable homes.”

Wheatley Group Chief Executive Martin Armstrong said:

“We are delighted to have received £16 million of investment through the Allia charitable bond scheme. This helps us progress our plans for hundreds of new affordable homes in and around Edinburgh as part of our wider new-build programme in support of the SNP Government’s More Homes Scotland agenda.”

Daniel Carrico, Head of Origination at Allia Impact Finance added:

“Another £40 million builds on our charitable bond programme. This will grow the success of this programme since it started over four years ago. We look forward to working with more housing associations and supporting them with this unique source of unsecured finance.”

Kenneth Gibson MSP commented:

“The SNP Government is the only government in the UK to invest in charitable bonds. By April 2017, it had invested in twelve bonds with total investments of £70m already having provided development finance for 935 affordable homes and generating over £17m in additional grant for charities.

“As part of the More Homes Scotland approach to deliver at least 50,000 affordable homes by 2021, the SNP Government uses a variety of innovative ways to help make the most of existing public funding and secure additional private sector investment.

“Other programmes include the Local Affordable Housing Trust initiative, a Scottish charity set up to provide long-term, mid-market rented housing in Scotland, the National Housing Trust initiative, the Mid Market Rent scheme etc.”

For more information on the SNP Government’s innovative solutions to increase the affordable housing supply, click here.


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