In May of this year the Department for Communities and Local Government (DCLG) rejected a Brighton & Hove plan to establish a council controlled private company to generate funds to renovate the Council’s housing stock. The scheme has now been amended.
It involves leasing 499 properties on 125 year terms to a specially created private company - Brighton & Hove Seaside Community Homes - which can then borrow £45m from a commercial bank with the rental income from the properties serving as collateral for the loan. The borrowed money can then be used to bring the Council’s housing stock up to the government’s Decent Homes Standard. All Council houses are supposed to reach this standard by 2010.
In its original response to the council the DCLG set out three problem areas: the uncertainty of the finance for the project, the relationship between the council and the private company and the impact on tenants (see earlier story).
One of the big four banks has now agreed to fund the scheme and the Council has by-passed the DCLG using existing powers that do not require their consent as long as the homes are used to house vulnerable people. It has already identified 126 homes to be leased to the new company after consultation on the scheme is complete.
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Brighton & Hove City Council