In late 2018 the Leicester Mercury (September 28) ran an article describing how:
“Leicester City Council is hoping to negotiate a deal which would see it hand over three acres of land shared by the disused Southfields Infants School and the Newry Junior School, in Eyres Monsell, to developers who will then demolish the existing buildings and replace them with 52 affordable homes.”
In this instance, the land which is worth £1.35 million on the open market, is being generously gifted to a private housing firm, Grange Developments Ltd (GDL). In exchange for receiving this £1 million plot of land, GDL has agreed to sell (not give away) “five acres of land it already owns, off Abbey Park Road, to the Government so it can be developed as a new free school for the city.”*
For housing profiteers, such deals must feel like Christmas has come early.
Handing over land to private property developers seems to be a longstanding habit for Leicester’s Labour Council. Since 2011 (when Sir Peter Soulsby became our City Mayor) a total of 28 acres of land — “which the council says would have fetched nearly £5.4 million on the open market” — has scandalously been given to housing associations “for a combined total of £9.”
These various housing associations then, in turn, built 273 so-called affordable homes (“The sites owned by Leicester council worth millions but sold for just £1,” Mercury, September 27, 2018). Soulsby boasted that the construction of these 273 homes “would have cost us £29 million to build ourselves.”**
On other related matters, Soulsby went on to state:
“We have also sold land for market value – for example, at St Mary’s allotments, where the developer and their housing association partner are building 70 per cent of the 87 new homes on the site as affordable housing – far in excess of the 20 per cent planning rules say they must build.
“We have also just announced that we will also be building council houses ourselves again, launching our own housing company, Housing Leicester Limited. It will start building new council homes across the city from spring 2019.”
This latter initiative represents a potential step forward for our Blairite Labour Council, because there is a world of difference between so-called affordable homes (which in reality are unaffordable to most people as their rents are set at 80% of market rents) and Council-owned houses. Tragically, however, it seems that even this Council-run operation is not committed to solely building council homes, as the Council report that:
“Housing Leicester Ltd has been set up [in January 2018] as Leicester’s housing company to deliver affordable housing, private rented properties and houses for sale.” (“Housing Scrutiny Commission” report, November 26, 2018)***
What this means in practice remains to be determined.
Last summer, working through their new initiative Housing Leicester Ltd, the Council announced that they planned to spend £49 million on constructing 300 new properties. As the Mercury (August 15) reported at the time, the Council…
“…say 210 of the homes would be available at an affordable rent. The authority intends to sell the other 90 homes at an estimated profit of £18,000 per sale, to help fund the scheme.”
Construction of the first 50 homes — on land that is already owned by the Council – is due to commence at the start of 2019, with the second phase of building to commence in April continuing through to 2020/21. In terms of funding this project, the Council have stated that they will be financing their house-building program by tapping into four sources of funding. This will involve
- selling 90 homes to the private sector to make £12 million
- using £7 million from Housing Reserves
- using their borrowing powers to get a loan of £21 million
- using £9 million of Right to Buy receipts.
In outlining the details of this project to the local newspaper, Soulsby added that he would also “like the Government to scrap Right to Buy under which tenants can buy their council homes.” That is good news indeed and certainly needs to be followed-up by some form of public campaigning.
The Right to Buy scheme is a particularly pernicious set-up, as it not only places council homes on the private market, but to make matter even worse, when these homes are lost to the private sector only 30% of the money raised from their sale actually comes back to local councils (with the rest being kept by the Government). (The Mercury article noted that since 2015 approximately 800 city council homes had been sold which brought in around £30 million to the Council and £70 million to the Government.)
Soulsby also went on to explain: “I would like to go back to the time in the 1970s and 1980s when it was considered an important council duty to provide decent affordable homes and they would build 1,000 a year.” But to undermine this socialist ideal he then bizarrely added: “Now that is no longer an option.”
Either way, in the face of Soulsby’s pessimism the six proposed sites for the construction of the first fifty homes under the Housing Leicester Ltd scheme are:
- Selby Avenue – Hamilton – “has potential for between four and six new homes.” Brocklesby Way – Hamilton – “Five homes could be built on this wedge of land adjacent to green land.”
- Maplin Road – Hamilton – “It could house up to three properties, four if a substation were to be resited.”
- Ambassador Road – Humberstone – “the site is ready to develop into either two two-bed homes or four one-bed flats.”
- Rosshill Crescent – Thurnby Lodge – “Green space would be large enough for around 12 properties.”
- Felstead Road – Beaumont Leys – “Square of space could be room for 20 homes”.
This however is not the only housing plan that has been hatched by our City Council to help house the 6,000 people currently on the waiting list for a council home. So, in December they announced that they were planning to spend £8 million on “buying private homes in Leicester to be made available to people waiting for a council house.” As the Mercury (December 1) reported:
“The council intends to borrow £4 million towards the cost of the scheme against the rental income it will get from the new homes. It will use £2.4 million from the sale of council homes under the Right to Buy scheme and the remaining £1.6 million will come from the council’s capital programme.
“The money would cover the cost of any works required to bring purchased properties up to the council’s required standards for letting, and the cost of new builds on sites acquired. Income from rents on the purchased properties would cover the cost of repairs, maintenance and lettings, and financing the cost of borrowing.”
(Incidentally, in the same Mercury article, it was explained that over the next few years Housing Leicester Ltd was now planning to build “370 affordable homes” — 70 more than reported in the summer.)
However, despite belatedly launching their own house building company, the Council are still apparently committed to selling off public land to housing associations. Thus, in October the Council announced that they were giving a housing association 28 acres of unused land (again for just £1) to allow the construction of 300 affordable homes. (The article describing this deal points out the cost of building these 300 homes would be approximately £102,000 per property.)
Moreover, this week the City Council launched their latest housing development project which apparently focuses on building houses on the “disused former industrial land on the banks of the River Soar in Leicester.” The 8.6 acre site off Repton Street, in Frog Island, is presently owned by private concerns, but the Council want to convince the owners of this land to use their site to build 250 homes with “a mixture of houses and apartment blocks up to six storeys high.” With breathless anticipation of this non-council housing scheme Peter Soulsby explained to the Mercury:
“We can help guide the future development of this important site, focussing on the opportunities for the city and making it a less risky proposition for potential investors and private developers.” (“Derelict industrial site in Leicester earmarked for hundreds of new homes,” Mercury, February 21)
Addendum: Other Council Funded Private Housing Schemes That Are Ongoing
In 2017, the Leicester Mercury (October 8, 2017) reported that the Council had got the go-ahead to develop an 18 acre site around All Saints Road on the bank of the River Soar which is owned by the Council. In this instance the proposed Waterside regeneration project does not state any commitment to building even so-called affordable housing. Thus, the private developer in question, Keepmoat Homes, apparently aims to “deliver over 350 new homes and 5,500 square metres of new office space, along with new parks and green spaces.”
The Council adds that “the scheme will represent around £45milllion of private investment into the area.” Of course, the Council has also invested a lot of our cities money in this private project, and in November 2016 it was reported that: “Leicester City Council has already allocated £15m worth of capital funding to the scheme, with another £45m expected to be invested.” The Mercury article from 2017 also noted that the Council “earmarked £15 million of capital funding for the Waterside scheme”; adding that the “Leicester and Leicestershire Enterprise Partnership (LLEP) also successfully bid for up to £20milllion from the Government’s Local Growth Fund to acquire the land and property needed and help kick start the major regeneration project.”
More recent information from Keepmoat itself points out that the plan will now “deliver 367 new homes and apartments along with commercial office space.” They add: “The site is due to receive full planning consent in September 2018 and will take approximately 7 years to complete.”
* The key person behind Grange Developments Ltd is local housing mogul Chris Beighton – the 47th richest person in Leicestershire. Beighton is most famous as the founder of Westleigh Homes, “one of the top five developers of affordable housing in the UK”. Last year he sold his company for £135 million. (“Leicestershire homebuilder Westleigh sold for £135m,” Mercury, April 12, 2018)
** £1 Housing Giveaways Since 2011 (source: Leicester Mercury):
- Manor Farm phase 1 (Hamilton) 4.21 acres – market value £1.8m – “Sold to East Midlands Housing to develop 43 affordable homes and 10 New Build Homebuy properties”
- Manor Farm phase 2 – 1.35 acres – market value £650,000 – “Sold to East Midlands Housing to develop 15 affordable properties including 10 supported housing units”
- Benbow Rise phase 1 (Braunstone) – 1.45 acres – market value £150,000 – “Sold to Nottingham Community Housing Association to develop 22 affordable homes including 6 supported housing units”
- Benbow Rise phase 2 – 0.9 acres – market value £100,000 – “Sold to Nottingham Community Housing Association to develop 17 affordable rental homes”
- Benbow Rise phase 3 – 2.16 acres – market value £0 – “Sold to Longhurst Group/Nottingham Community Housing Association to develop 23 affordable rental homes”
- Humberstone Depot, The Portwey – 0.51 acres – market value £150,000 – “Sold to Nottingham Community Housing Association to build 9 affordable homes”
- Saffron Lane Velodrome – 2.83 acres – market value £800,000 – “Sold to LHA/ASRA for 45 affordable homes”
- Queensmead, Hamelin Road (Braunstone) – 1.28 acres – market value £150,000 – “Sold to Nottingham Community Housing Association for 21 affordable homes for rent”
- Heathcott Road (Saffron Lane) – 13.21 – market value £1.5m – “Sold to Saffron Lane Neighbourhood Council / East Midlands Housing to develop 68 affordable homes”
- Erskine Street (city centre) – 0.65 acres – market value £101,500 – “Sold for discounted £21,926 to Midland Heart/Westleigh for 9 affordable homes”
*** The three board members of Housing Leicester Ltd are:
- Phil Coyne (the Strategic Director of City Development and Neighbourhoods at Leicester City Council)
- Chris Burgin (the Director of Housing at Leicester City Council)
- Colin Sharpe (the Head of Finance at Leicester City Council)
Just as a point of interest, the combined salaries of these three Council employees is in excess of £250,000 a year (data from Leicester Mercury — as of March 2018 Coyne earns £117,042 a year and likewise Burgin earns £89,042 a year for his Council position).