The National Housing Trust initiative, a joint project of the Scottish Government and the Scottish Futures Trust, proposes a new funding model for affordable housing.

The main aim is kick-start activity on mothballed building sites and create or safeguard thousands of construction jobs.

Under the scheme, local authorities will receive loans to finance new-builds, paying 65% of the purchase price to an affiliated developer up front.

After an agreed rental period, the properties would be sold on and the income used to pay off any outstanding loans.

Housing developers are being asked to respond to the OJEU advert by October 25, 2010. Clare Mills at the Scotiish Futures Trust in Edinburgh is handling the procedure. Email: nhttenders@scottishfuturestrust.org.uk

The bid notice estimates that spending on housing could eventually reach £300m.

Twelve authorities have signed up, including Glasgow City Council, City of Edinburgh Council, Highland Council and Stirling Council.

In Edinburgh where 600 NHT homes are being sought, Scottish Housing and Communities Minister Alex Neil said: “Building more affordable homes across Scotland presents a formidable challenge in a climate of increasing financial constraint.

“The National Housing Trust model breaks new ground and I am delighted that so many councils have embraced this approach as one that can help solve housing pressures locally.

“The scheme has been designed to ensure that homes delivered through the National Housing Trust are affordable and offer good value for taxpayers’ money.”

Barry White, Chief Executive of the Scottish Futures Trust, said: “In these challenging economic times, NHT opens the doors to build affordable housing in Scotland.

“This demonstrates how the public and private sectors can work together in an imaginative way.”

Jonathan Fair from industry body Homes for Scotland said: “The NHT is a prime example of the sort of progressive thinking that must be applied to meeting Scotland’s housing needs at a time when public spending is under tremendous pressure.

“The benefits of such an approach are significant. In addition to helping support economic recovery and maintaining a skill base, the NHT will offer housing options to a market segment currently uncatered for – those stuck between social renting and outright home ownership.”

Councillor Norman Work, vice-convener for Housing at the City of Edinburgh Council, said the Council was delighted to be involved in the scheme.

“This is an innovative way of tackling the shortage of affordable homes not just in Edinburgh but around the country.

“Everyone knows more needs to be done and it’s important the public and private sector work in partnership on this project.

“My message to developers is ‘get on board’ now and let’s give the construction industry and affordable housing market a much-needed boost.”

The procedure

The National Housing Trust initiative is an innovative scheme that will enable new build homes to be acquired from developers in a joint partnership scheme between the local authority, developers, the Scottish Futures Trust and the Scottish Government.

For each local authority area the shortlisted developers will be appointed on the basis of their tender submissions which will include details of proposed developments in the area.

Once the framework agreements are in place, the local authorities will be able to proceed by way of call offs.

The authorities will conduct one or more mini-competitions on the basis of the framework contract documents.

The developments will then be awarded to the house builders that submitted the best tender on the basis of the award criteria specified in the contract documents.