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High hopes for housing company in proactive plan

Author: Gavin Moore Published: 30th July 2017 09:30
High hopes for housing company in proactive planHigh hopes for housing company in proactive plan

The council has resolved to establish a new housing company in a plan to boost its future financial position and create new housing opportunities in the district.

On Wednesday, 19 July 2017, a meeting of South Northamptonshire Council (SNC) approved proposals to establish a Local Development Company as a means of generating income and protecting the council’s future financial position.

The decision gives the green light to a business plan backed by an external due diligence report and the advice of leading financial and property experts. The council has allocated a £50,000 budget to help set the company up.

The initial business plan for the company covers the period 2017-2022 with a 30 year financial plan.

It is based on the initial acquisition of 20 new build properties for private rent, and the development of council owned sites comprising just over 300 properties that will deliver a mixture of private rent, affordable housing and open market sale.

Cllr Peter Rawlinson, SNC’s portfolio holder for finance and procurement, said: “Not only is the Local Development Company a fantastic initiative when it comes to ensuring the sustainability of the council, we are also investing into our district, providing new employment opportunities  and plugging a gap in the housing market. It’s a win-win situation

“Reductions in funding from central Government present a big challenge, but we at SNC are determined to protect the services we deliver rather than making cuts.

“We are aware that further reductions are coming, and to adapt to life in these new circumstances we need to find alternative sources of income.

“The proposals we have approved are the result of comprehensive research into best practice as already realised by other local authorities, reflecting the advice of industry leading experts.”

South Northamptonshire has housing needs which are not currently met; there are affordability issues and a lack of private rental accommodation.

The establishment of the Local Development Company by SNC will help to address this shortfall.
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Comments

Nick H
At 16:12 on 16th August 2017, Nick H commented:
I did think this might be a good idea, but I am starting to get concerned. £50,000 to set up the business will not cover any wages, and as the plan begins with the acquisition of 20 new build properties, where will the money for those come from, as I would be surprised if a developer will give them away, and £50,000 won't buy any properties.

If money is being raised through developing council owned sights as mentioned, I'd be interested to know where these sites are, who will be purchasing them, and what will be built on them, as I suspect that no exisiting commercial developer will be interested in developing such sights for affordable homes only.

The other issue is that this is being used as a way to make money for the council. Are councils allowed to do that through business interests? And what happens if that business fails for whatever reason, like a housing price crash for example. Can such a business cope with a slump in building should one occur, and will it cost tax payers money to keep it running in such a situation if it arose?

One of the reason for there being a lack of private rental accomodation, and affordability issues, is the planning policy which is controlled by SNC, as they are the local planning authority. Why have they failed to get enough affordable homes built, or planned, by the private sector developers?

Nick Holder

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