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City council to set up own company to build affordable homes

Published on 13 March 2018


LEICESTER’S City Mayor has announced ambitious plans for the city council to set up its own housing company – and construction on the first 50 new homes could begin this year.

The creation of the company would enable the council to build affordable new homes across the city on sites already in its ownership.

In the first phase of construction, the company would aim to build 50 two- or three-bed houses and some bungalows. Most of these would be offered to people on the council’s housing register, with some possibly being sold to help subsidise costs.

The second phase of work would involve building homes for private rentals and low-cost ownership, as well as houses for sale.

The council has already earmarked more than £2 million in its capital programme for the house-building programme, and can also use some of the money raised through the sale of its council houses, although most of this has to go to the Government.

Once established the new company would be able to borrow money from the city council that would otherwise be set aside to pay off debt. The company would also bid for pots of funding from the Government.

City Mayor Sir Peter Soulsby said: “Because of cuts in benefits, soaring private rents and the impact of the Government’s austerity measures, more people than ever are in need of affordable housing, but there is very little available right across the country.

“By setting up an arms-length company, we can access the finance we need to build new homes and make an impact on the housing market that would otherwise not be open to us.”

Assistant city mayor for housing Cllr Andy Connelly said: “We already spend more than £5 million a year on services to prevent people from becoming homeless and this important work will continue.

“The creation of the new housing company is a key part of our wider strategy to reduce homelessness and one of several new initiatives we will be launching in the coming months.”

The company – yet to be named – would be separate from the city council but owned by it. It would be led by directors and a housing development programme manager, but other staff resources – such as legal, financial and administrative support – would come from within the city council.

The council has not built any new homes since 2012/13, when 81 were constructed at sites on Laburnum Road, The Fairway and Hamelin Road, although it has made land available for others to build on. This includes a site at Heathcott Road, where East Midlands Housing Association completed 68 new homes – built to Passive House standards – in 2017.

In the last ten years the city council has worked with partners to provide around 600 new affordable homes, with more than half of those – 381 – being built in 2010/11.