£9M TO PUT UP 224 NEW COUNCIL HOUSES
Right to Buy receipts to fund development
NEARLY £9 million raised through the sale of council houses is set to be invested in hundreds of new homes over the next three years.
Stoke-on-trent City Council currently has £8.75 million of unspent Right to Buy receipts, which can be used to cover up to 30 per cent of the cost of new social housing.
This could be used to provide around 224 new affordable homes in the city, but would need another £20.4 million of investment.
And any RTB receipts that are not spent before the three-year deadline will have to paid back to government – plus interest.
Council leaders plan to spend some of the money on new council homes, with funds also being granted to housing associations, to ensure all the receipts can be spent on time.
According to a council report, if this combined delivery approach is not taken, some money would need to be paid back as early as next year, with £2.99 million of recepits due to be spent in 2021/22.
The council is set to spend the money on a range of schemes – including the Fenton Local Centre redevelopment, Newport Lane and a number of unidentified ‘pipeline projects’.
The report states: “Given the demand for new affordable homes in the city and the level of investment required, it is recommended that there is a balanced approach to delivery, utilising both council and registered providers’ resources.
“Should the combined delivery approach not be taken, and the pipeline development projects to deliver new affordable housing in the city not be taken forward for development, a deficit in the spend of retained Right to Buy receipts could occur as early as quarter two of 2021/2022.”
The city council started investing retained RTB receipts in new housing in 2015/16, and since then a total of £8.4 million has been spent.
Over this period, no funds have had to be returned to the government.
According to the report, the council spends the funding on both new builds and acquisitions.
In the past, many of the properties purchased by the council through the use of receipts have been bungalows.
But the authority is now finding itself being priced out of the market for these homes.
The report states: “The market is competitive for this property type and we have seen a rise in desirability within the private market and increase in market values that is pushing the viability and financial investment to the council over acceptable parameters.
“Nevertheless, a small number of properties do meet the acceptable criteria, and therefore it is proposed to continue with acquisitions from the open market in line with housing need and demand data in suitable areas, and where a viable investment.”
Cabinet members at the city council will be asked to approve spending the RTB receipts by adopting the combined delivery approach when they meet tomorrow.