Investors spooked by Scottish independence referendum

Carduus, a bond aggregator, which is planning a £200m club bond, said investors have warned landlords would have to pay up to an additional 0.5% on the interest before the referendum - or afterwards in the event of a ‘yes’ vote.

The possibility of currency change in particular has made lenders reluctant to engage with Scottish landlords over the last 12 months.

Link Group is the only Scottish association to have secured a long-term funding deal this year.

Neil Hall, finance director at the 6,000-home landlord, said only M&G, which eventually agreed a 31-year loan for £45m, had been willing to do a deal after other investors were ‘spooked’.

‘At one stage we had up to seven investors very interested in what we were offering, but one by one they fell away, with the same reason given, which was the uncertainty created by the referendum,’ he said.

The Link deal was only agreed in April after the group agreed to provisions that cover any potential change of currency after independence.

An institutional investor, who did not want to be named, added: ‘We are talking to some [Scottish] organisations at the moment, but we are very much of a view that we will work things out after the 18th, when we know what is happening.

‘If it’s a “yes” vote then I think it will still be challenging in the interim period while people work out what that really means, but there is no reason why we wouldn’t continue to lend to landlords in an independent Scotland.’

Keith Anderson, chief executive of Port of Leith Housing Association said the ‘inability to raise long term finance’ as a result of the referendum was a factor in the lack of supply of affordable housing.

Inside Housing revealed last September that Wheatley Housing Group planned to raise £500m on the capital markets to build thousands of homes. However, the 45,000-home landlord said the uncertainty created by the referendum has not been a factor in delaying the deal.