Glasgow transfer landlord may not have to repay £300m loan

Glasgow's transfer landlord got a major boost last week from a decision that it may not have to repay £300m borrowed from the Scottish Executive.

The news came amid calls for more investment options to be made available for the improvement of Scottish housing.

Glasgow Housing Association took over 81,000 properties on Friday after months of battle with anti-transfer campaigners.

Just hours later, Scottish social justice minister Margaret Curran announced that repayment on the £300m "soft" loans would be waived – provided GHA transfers 80% of its stock to local housing organisations in a "second-stage" transfer.

A Scottish Executive spokesperson said the decision had been taken "in the final stages of transactions" to encourage the second-stage transfer. But opponents claimed second-stage transfer had always been part of GHA's aims and that the waiver was the latest in a series of moves to prop up the controversial deal.

Sean Clerkin, chairman of the Glasgow Campaign Against Housing Stock Transfer, said: "This is a gift from the taxpayer to a private landlord that will generate profits for banks. It would be better for investment to be made in public sector housing."

The repayment waiver would push the total amount of funding for the transfer to more than £2.3bn. Almost £1bn has come from the Treasury to pay off Glasgow's housing debt, but the Scottish Executive has come up with the remainder, including a £100m contingency fund to ensure additional security for GHA.

Curran also announced approval for an early action programme that will lead to 600 homes being built over three years by Glasgow's local housing organisations in addition to GHA's original business.

The calls for more investment options for Scottish housing came at the Chartered Institute of Housing in Scotland's annual conference on Wednesday.

CIH in Scotland chair Lynn McCulloch said that along with stock transfer and limited prudential borrowing, councils should be "allowed more freedom to use income from right-to-buy sales". Local authorities should also have the opportunity to set up their own companies to manage housing stock, she said.

Despite the completion of Glasgow's £4bn transfer, the largest so far in Britain, Scottish councils have been reluctant to follow suit.

Last December, Aberdeen tenants voted owerwhelmingly for the council to remain as their landlord.