Thurrock Council to discuss building council homes

UP to 500 new council homes could be built in Thurrock over the next 10 years under new plans published by the council.

Leaders of Thurrock Council will meet next week to discuss a new council home building programme that could see as many as 500 new council homes built by 2030, along with a further commitment to ensure private developments will include ‘affordable’ housing.

A council report prepared ahead of the meeting notes that these developments could be “self-financing” through rent priced at 57 per cent of the average market rate – this equates to an average weekly rent charge of £139.

The council will finance for the homes using their Housing Revenue Account (HRA), which is a pot of money that councils use to manage housing revenue and expenditure.

At the end of last year, the Government announced it was scrapping restrictions on the amount local authorities can borrow through the HRA to build council housing. As a result, Thurrock aims to pay for the house building by borrowing and using money raised from Right to Buy sales.

Council officers note in the report: “The removal of the HRA Debt Cap in October 2018 has provided local authorities in England and Wales with new found freedoms to provide new Council homes.

“However, the ability to fund these new homes still needs to ensure the HRA business plan is viable and can be sustained. The council therefore wishes to use this opportunity to provide and speed up the delivery of council houses in the borough in a manner that does not detrimentally impact the HRA business plan.”

However, they warn that the financial details are based on “high level assumptions” and “detailed modelling would be required to fully clarify the financial implications”.

If the proposal to build council homes is not backed by members of the cabinet when they meet on Wednesday, an alternative option could be for the council to rely on the private sector to deliver ‘affordable’ homes. However, the report says the council would have “no control over the delivery and quality of these homes”.

Furthermore, the definition of affordable homes can vary widely and they are often priced significantly higher than council homes, typically at 80 per cent of the average market rent price.

The council’s existing policy on affordable homes is to ensure that 35 per cent of privately developed schemes are affordable. However this is often dependent on “financial viability” and many developers pay financial contributions to alternative affordable housing sites rather than building them themselves.

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