A report to the council’s cabinet tomorrow (Friday, 23 March) sets out a £50m budget to deliver the first phase of a 10,000 build and refurbishment programme over the next 18 months and recommends the approval to begin recruiting a team of housing experts to deliver the scheme.
The ground-breaking housing company aims to dramatically shake up the city’s housing market and accelerate the rent to buy sector over the coming decade by offering packages that take a percentage from rent towards a deposit.
The new company, which was formally established in January, will also aim to create bespoke properties for the homeless, foster carers, large families, the elderly and people with a disability and to improve the availability of good quality, affordable homes in the city.
The Mayor of Liverpool has said Foundations, which is earmarked to expand to a £500m programme, is fundamental to addressing both the city’s need to develop 30,000 new homes by 2030 and its economic future as surveys show the city’s housing supply dominated by small terraced houses, which skews the city’s council tax revenues.
The cabinet report has identified four streams of how the housing stock could be developed, financed through a series of loans which would all be subject to a detailed business case:
1) Purchase of New Build: The council has identified a number of sites across the city with planning permission for approx. 100 units which are due to be built out over the next 18 months (a mixture of 2-3 bedroom houses).
2) New Build on Council Land: The council have identified a site within its ownership, in north Liverpool, suitable for the development of a minimum of 120 homes (a mixture of 2-3 bedroom houses). It is proposed that the council itself invests in the construction of these homes and then sell on to Foundations.
3) Purchase of Existing Homes: Part of the growth strategy includes a focus on buying and refurbishing homes in areas most likely to be facing issues of housing stress. Between 140 and 300 such properties fall into this category.
4) Land Asset Transfer: The investment in land ensures a robust supply chain for the company. This land will be paid over a period of time from either future house sales or from a dividend payment. The company will appraise this methodology over its initial business plan and cash flow proposals.
Foundations, which is predicted to create 2,000 new jobs, is Mayor Joe Anderson’s flagship housing policy to revolutionise the council’s role to bolster home ownership and for the local authority to act as a “high quality, ethical landlord” to help build sustainable neighbourhoods and offer tenants security of tenure.
Foundations will also enable the council to future proof the housing market for an ageing population, ensuring people can live independently for longer and provide intermediary accommodation that help keeps people out of long-term hospital stays. It will also help reduce properties becoming void and reduce the chances of properties being converted into inappropriate Houses in Multiple Occupation (HMOs).
Mayor Anderson said: “Foundations will radically reshape Liverpool’s housing market and is fundamental to ensuring the city’s growth is fair to all – providing quality, affordable homes for people with many differing needs.
“A lot of work has been going on behind the scenes to get Foundations up and running and the recruitment of the team is the first step to delivering a housing programme that will transform the lives of thousands of people for generations to come.
“I expect to see a lot of activity over the coming 12 months as the team beds in and plans develop. This will be a real game changer for the city’s housing market and provide a much needed boost to our council tax revenues.”
A major advantage for the council would be that profits of both house sales and rentals will be returned to the council, as the only shareholder in the company, with a percentage reinvested in new stock.
The creation of Foundations takes forward an award-winning approach that has led to the build of 750 new properties with Liverpool Mutual Homes and Redrow, via the Liverpool Housing Partnership, the profits from which have been used to create 450 affordable homes.
The new housing company will also underpin the council’s other major strategic housing goals such as the renewal of older neighbourhoods and increasing the levels of home ownership in the city by offering tenants rental products that will enable residents to move from rental to home ownership.
Through Foundations the city council will also be considering other property development and rental opportunities which may be commercially viable e.g. shop, office or other business premises.
‘Councillor Frank Hont, Cabinet Member for Housing, added: “Liverpool, like many cities, has suffered from a lack of government support in the housing sector and Foundations is a great way to unlock a huge amount of potential in communities right across the city.
“We have housing stock that can be refurbished and we have land that can be built on so the company is already in a great place before the team has even been recruited.
“It’s an exciting prospect for the council to be able to influence the quality of housing and support people who want to buy by turning rent into a deposit. The housing market has malfunctioned for too long and I’m delighted that through Foundations we’re going to be able to correct that in this city.”