DGHP, which became part of Wheatley Group in December 2019, has ambitions to develop up to 1,000 homes over the next five years.

The registered social landlord (RSL) said the flexible loan facility, the biggest investment by M&G in the Scottish social housing sector, will bring it a step closer to realising this ambition as its existing bank debt posed some constraints on its development and investment plans.

The long-term investment, a weighted average of 25-years, was agreed by both parties working flexibly to a tight timescale.

DGHP board chairman, Bill Robertson, said: “This affordable loan facility is great news for tenants and communities in Dumfries and Galloway. Working as a partner in Wheatley allows us to do much more than we could before and this deal with M&G is one of the first steps in realising our plans to bring hundreds of new affordable homes to the region.”

Wheatley Group chairman, Alastair MacNish, said: “We have an unyielding commitment to increasing the number of affordable homes in our communities at a time when the availability and supply of housing remains an acute priority.

“We are delighted DGHP has secured this fantastic deal with M&G which will enable them to take forward their new-build plans for the region. It’s a huge vote of confidence in DGHP and the region, in Wheatley Group and the affordable housing sector in Scotland.”

Mark Davie, head of social housing, M&G Investments, added: “We are pleased to be supporting DGHP and Wheatley in the next step on their journey.  They have a clear vision and ambition to deliver affordable homes to those in the area they serve.

“Through its wider activities, Wheatley supports the social well-being of its communities in areas such as employment, tackling poverty, digital inclusion, education, sports and the arts. The deal demonstrates the important role institutional investors play in providing finance to organisations that have a positive impact on the communities they operate in and our wider society.

“This is a new relationship for us, our third financing agreement with a registered social landlord in Scotland and will generate cashflows that are secured against residential property for our pension fund investors.”

In recent years, non-bank lenders such as M&G have been providing an increasing amount of longer-term finance as banks withdraw from this market. M&G has around £6 billion invested in UK social housing through property transactions, public bonds and private placements.

DGHP is the second largest RSL in Scotland, owning and managing over 10,300 homes in Dumfries and Galloway in South-West Scotland.