Hearthstone Investments has launched its Housing Fund for Scotland and said it aimed to invest up to £150m (€187m) in affordable, social and private-rented sector housing in the country.

The UK company, which runs residential investment funds, confirmed the actual launch of a fund it first announced back in April.

The fund could lead to the creation of more than 1,000 new homes in Scotland over the next few years, Hearthstone said.

Falkirk Council Pension Fund said in April it was committing £30m to the forthcoming fund.

The investment manager said part of the Falkirk commitment would be invested in the Falkirk, Clackmannanshire and Stirling areas, thereby having a big effect on the local area.

Christopher Down, Hearthstone’s chief executive, said: “Residential property throughout the UK remains a strong long-term investment, with significant scale, low volatility and attractive demand/supply characteristics.”

Hearthstone is already in “active discussions” with a number of other Scottish pension funds, he said.

The investment manager described the investment case for Scottish housing as compelling. 

New housing supply in the country is still 42% below pre-recession levels, it said.

On top of this, the mix of tenure has changed in the last few years towards private-rented sector and mid-market affordable housing – and away from home ownership. 

Hearthstone pointed out that the Scottish government currently working to build 30,000 new affordable homes by the end of 2016, adding that the new fund would play a role in meeting that target.