Minutes:
Question
Agenda item 76, page 41 talks about a target of 1,200 new affordable homes – can you confirm this is a net figure, that the plan will be for an additional 1,200 affordable new homes to be added to the current Council housing stock.
Answer
First of all I will talk about Council housing. As the Shareholders’ Report states we have an ambitious target for the Council to deliver 1,000 homes over 4 years producing a 5% return and this is known as the Housing 1-4-5 project. Now 5% is significantly less than you would expect if you were a builder or a developer so it reflects the fact there is a large number of affordable homes.
I would expect a very large proportion of these homes will be delivered through the housing companies but some of the houses will also be delivered through the Housing Revenue Account. If you look at the Housing Revenue Account in the paper that is being presented today you will see that we are £1.4m to the good. We also have a situation where about 18 months ago the Government removed the cap on HRA because before we could not borrow any money as borrowings were low and what we are doing at the moment is we are going through a programme to look at just how much money we can borrow in the HRA. Now those houses if they are bought through the HRA will all go into the housing stock.
We are developing on Council land and we are also in discussions with a number of developers to explore the opportunity of taking affordable housing where they want to sell that affordable housing and that is being done through Loddon Homes in much the same way as any registered provided.
I will also highlight in the Shareholders’ report that we have a more efficient and effective ‘One Team’ approach between the key Council departments and the housing companies. I am pleased to report that this approach is already producing results with a combined pipeline of over 1,200 potential new homes now identified and being investigated or actively progressed but obviously the only houses which will go onto the Council’s housing stock will be those houses bought in the HRA because they are social housing.
Supplementary Question
Do you have a target at this point in time for the number of true Council houses to be added on to Wokingham Borough Council’s housing stock?
Supplementary Answer
Because there has been a cap on the HRA which the Government had put on we are just now in the position that we can actually start to look at the borrowings and see where our appetite is. There is quite some room there and the way the borrowings are worked out is quite simple. You look at the rents you collect so you can service the debt. It would be my ambition to increase the HRA by 300-400 houses over the next four years. Again that is all dependent on how much borrowing we have got in there as we cannot borrow money that we cannot pay back obviously. It also depends on whether the Government changes the rules and regulations again.
We are aware that our social housing has stood still for quite some time because we have not been able to buy those houses because all the houses that were affordable homes in the past, over the last couple of years, have gone to registered housing companies not ourselves. But we are now looking to borrow money to actually buy houses to put into our own HRA which will be pure Council houses.
I would like to think that we would probably build 300 houses over the next four years maybe a bit more depends, as I say, we are looking at our borrowings and how much we can borrow and we are looking at how much of that we can pay back. We do not want to borrow money if we cannot pay it back. Remember that we have just come through a period as well where the rents have gone down for the last three years I think. We have had to reduce Council house rents and that has had quite a marked impact on the amount of money we get in. Now it is going back to the normal rate which is an increase which is based around the CPI and we now will be in a better position to target borrowings that we can use to build or buy social housing.