Council lends own company £130m to fund new homes

The money will fund 281 homes at fives sites in the borough
By Local Democracy Reporter Josh Mellor

Stock image (credit: Pixabay)
Stock image (credit: Pixabay)

Waltham Forest Council has agreed to lend its arms-length house building company £130million to build more than 250 new homes.

Launched in 2016, the council’s wholly-owned company Sixty Bricks is nearing the end of its first building phase, with 299 homes due to be finished by the end of this year.

Yesterday (3rd November), the council’s cabinet team agreed £130m in funding for the second phase, which aims to build 281 homes at five sites across Leytonstone, Walthamstow and Chingford.

According to the report before cabinet, the “growing demand” for all housing means the investment will make “considerable and compelling” profits.

However, a financial summary of the predicted profits has not been made public and the plans were approved in a private part of the cabinet meeting.

In a statement issued after the meeting, councillor Ahsan Khan, cabinet member for regeneration and housing said: “This investment couldn’t come at a more important time.

“Waltham Forest is recognised as one of the best places to live in London, but we need to continue our home building programme to meet the needs of our growing population.

“Plans for each scheme are currently being developed and local communities will have the chance to have their say.”

Speaking for the Conservative group, Cllr John Moss welcomed the council’s investment in delivering affordable homes.

However, he added: “We have always been concerned at the lack of democratic oversight of the activities of SixtyBricks, without which it is impossible to know that this investment represents good value for money.”

Plans for three schemes are likely to be submitted in early 2023 with 23 new homes at Vicarage Road in Leyton, 83 new homes at Priory Court Estate in Walthamstow and 105 new homes on the car park of Church Lane, next to Leytonstone station.

The homes at Priory Court, first consulted on in 2019, are planned between existing buildings on “four infill parcel areas” of the estate.

Other schemes where plans have not yet been submitted to the council includee 35 flats at Osborne Grove in Walthamstow and 35 flats above the soon-to-be rebuilt Chingford Library and Assembly Hall.

Unlike phase one, which has delivered 74% affordable housing overall, phase two aims for about 50% of the homes to be rented or sold affordably.

Figures show that 70 homes in Sixty Bricks’ second phase will be for social rent, 55 for shared ownership and 149 sold on the private market.

To fund the scheme Sixty Bricks will borrow £66.5m from the council at an interest rate of 6.5-8% and a further £63.5m from a ringfenced council housing account.

Risks to the plan, outlined in the report, including a 20% increase in build costs over the last 12-18 months and increased borrowing costs, which will affect both the council and potential house buyers.

Sixty Bricks’ wider strategy is to build 800 homes by 2026, of which half will be affordable.

By 2031, it hopes to have built 4,000 homes in the borough, a quarter of the borough’s housing target, by “scaling up” each year.

The council also has several ongoing large developments under an in-house team, who currently have 1754 homes in the “pipeline”.

More than half of the in-house developments will be sold on the private market, with the rest a combination of low-cost social housing, shared-ownership sales and rent at 80% of market rates.