UK Treasury help kick-starts 3,000 new properties in Aberdeen

A guarantee from the UK Treasury for an 80 million loan to finance a new construction of 3,000 houses in Aberdeen was announced today (August 15, 2014) by Treasury Secretary Danny Alexander.

The houses are being built by the Stewart Milne Group on a new green field plot called Countesswells in Aberdeen.

In addition to 3,000 homes, 750 of which will be affordable, the entire development will also include the infrastructure needed to support new residents, including education, parks, leisure and health facilities.

The development will take place over a period of 15 years with an expected total capital value of approximately 700 million in order to stimulate the local economy and secure up to 1,000 jobs.

To begin construction on the site, the developer has taken out a $ 80 million loan from the Bank of Scotland.

The UK Treasury guarantee applies to this loan and was crucial in getting this project off the ground. The rest of the development is financed from the income from apartment sales, as is customary in the industry.

Danny Alexander said:

The Countesswells development will create 3,000 new homes which is fantastic news for thousands of families in Aberdeen and Scotland’s economy in general.

This is a great example of how the strength of the UK’s balance sheet and hard-earned credit rating can be used to guarantee and support infrastructure projects across the country.

Glenn Allison, CEO of Stewart Milne Group, said:

We are pleased that we have succeeded in obtaining a guarantee for the delivery of Countesswells through HM Treasury.

It is an important project for the city over the next 15 years, providing much-needed housing and community facilities that will in turn support Aberdeen’s economic growth.

This is the latest project backed by the UK Guarantee Program, where the UK Government is already acting as the guarantor of over 1 billion in debt to help finance infrastructure projects.

Housing is one of the sectors eligible for a UK guarantee which can cover both social and economic infrastructure.

The Countesswells project is currently in the planning process and is expected to be completed with construction at the end of September

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