More than 1,000 homes could be built for rent in areas of high demand under government plans to stimulate the economy and create new jobs.

Developers will link with councils to build and let houses where people are unable to buy or rent at market prices.

A new National Housing Trust (NHT) aims to generate £130million in extra investment, kick-starting work on mothballed housing estates.

The plan, unveiled by the Scottish Government and funding body Scottish Futures Trust (SFT), will allow tenants to rent homes for between five and ten years.

Ten councils, from Aberdeenshire to Glasgow, are so far interested in the plan, which will see homes built with loans under-written by the Government.

Housing Minster Alex Neil said: "Traditional methods of supplying housing need to change because of the scale of the new economic and financial challenges we all face.

"Scotland is spearheading the drive in the UK for alternative sources of funding and innovative housing delivery models.

"The NHT breaks new ground and has potential to significantly increase the supply of affordable homes in many parts of the country."

Affordable housing

Councils will be asked to pay housebuilders 65% of the purchase price. At the end of the rental period, properties will be sold and receipts used to pay back the loans, with councils having first call on the money.

Once the debt is paid, any remaining money will be ploughed back into building more "affordable" housing.

Graeme Brown, director of housing charity Shelter Scotland, said: "With pressure on housing investment set to increase, it is imperative that we find new ways to build the homes Scotland needs.

"This new initiative is one such opportunity that, if successful, has the potential to be rolled to provide much needed new homes for those in greatest need."

SFT chief executive Barry White said: "I am confident that NHT will deliver affordable rented homes and give developers the opportunity to kick-start dormant projects."