Northampton Borough Council is set to agree to borrow £31million to help build affordable housing in the town.
This evening, at full council, members are expected to approve an increase in the Housing Revenue Account (HRA) budget by an additional £25million – funded through borrowing – for the acquisition of blocks of affordable homes.
It is also expected to approve similar borrowing for an additional £6million to enable for the acquisition or development of supported living homes.
The HRA is a ring-fenced account for the council’s housing stock. But investments in new builds are dropping off slowly over the next few years.
The council says that the additional borrowing will help the council, and Northampton Partnership Homes (NPH), to increase the programme for building new social and affordable homes over the coming years.
Increasing the supply of affordable housing will also reduce pressure on homelessness and temporary accommodation, the authority says.
A report from chief finance officer Stuart McGregor, which will be read by councillors prior to tonight’s meeting (June 3), states: “Homes England schemes and developer-led schemes require the provision of affordable housing. Developers often invite Registered Providers to bid for the affordable housing and, typically, this will sell for 50-60 per cent of the market value.
“As Northampton Borough Council is a Registered Provider, NPH is actively monitoring such opportunities. However, the timescales are often very short and Registered Providers are usually required to provide confirmation, when they submit their expression of interest, that funds are available (or will be) to complete the purchase.
“Although each scheme will require its own business case to demonstrate due diligence and value for money, there is a need to obtain council approval to increase the HRA borrowing and expenditure envelope.”
The borrowing funds would be separate to the £22.6million sum that is already allocated in the council’s capital budget to deliver 150 new homes, but the extra sum would allow the council to be ‘agile’ in purchasing properties ‘off plan’.
Mr McGregor adds: “As such acquisitions are likely to be of a large scale and require substantial investment, there is a need to gain council approval to increase the HRA borrowing envelope to progress such schemes.
“The specialist housing schemes offer the opportunity to contribute to the reduction in social care costs for the county council and future unitary council.”