East Lothian Council has agreed a £25m loan facility for East Lothian Housing Association (ELHA) in the first agreement of its kind in Scotland.

The proposals approved at a meeting of the full council will now go to Scottish government ministers for their consent to this innovative funding mechanism.

The council is able to borrow money from the UK Treasury at a lower rate than is available commercially and can pass on the benefit of this to ELHA.

ELHA will repay the loan to the council including the interest incurred and a small administration fee. Due to the potential sums involved this arrangement will be subject to consent from Scottish Ministers.

ELHA will be able to draw from the new £25m loan facility to top-up financing for affordable housing projects that have already received funding from the Scottish government.

This means that any development will already have been closely scrutinised and undergone the appropriate financial checks. Working in this way will avoid duplication and mean that funds will be readily available to make the most of development opportunities as they present themselves.


It follows a trial individual finance agreement with ELHA, which saw the housing association use a £200,000 loan to buy five new housing units for rent at Under Bolton Steading. Repayments are now being made to the council on that loan.

Cabinet member for Housing Councillor Stuart Currie said: "This new arrangement gives ELHA some security knowing that finance will be available when opportunities present themselves. They will bear all of the costs of loan interest and administration, and the council will hold the developable land as security, meaning that there is no risk to the taxpayer."

The council also approved the further development of measures to broaden the support available for the private market, including an improved Scheme of Assistance for owner-occupiers.

The council currently offers financial assistance to owner-occupiers to carry out essential repairs that will improve the condition of their property secured through charging orders. Councillors agreed that officials should consider broadening this service including the potential to support first-time buyers with mortgage arrangements to get onto the property ladder therefore diverting them from the council's housing list. This would also be subject to ministerial consent.

A review is currently ongoing within Community Housing and Property Management to examine existing arrangements and further recommendations will be made at a future council meeting on what shape this could take.

Councillor Currie added: "If we can offer people practical support to stay in and improve their own home there is less chance of them seeking a council property in the future. The proposals before us today give an exciting glimpse of the measures that we hope to put in place."

(GK/KMcA)