Highland Council reveals plans for funding its homes scheme

HIGHLAND Council revealed radical plans yesterday for funding the construction of hundreds of extra local authority homes.

Housing officials aim to raise £18.2million to build up to 650 council houses by selling vacant properties to a private sector organisation.

They hope the scheme, which is the first of its kind in Scotland, will help alleviate the acute housing shortage.

About 11,000 people are currently on the area’s waiting list for housing and some 2,000 people present themselves as homeless to the local authority each year.

Only properties becoming vacant would be transferred, an estimated 3,000 units over five years.

While rents would be payable to the private sector organisation – or special-purpose vehicle (SPV) – the local authority would maintain and repair the properties.

The council would also retain the right to lease the houses to people from the common housing list.

The properties would remain with the SPV for 25 years before being transferred back to Highland Council at no cost.

Councillor Margaret Davidson, chairwoman of the housing and social work committee, admitted the idea was complex but said it was the council’s best prospect of building more local authority houses, particularly given that the council’s housing debt was unlikely to be written off.

The debt now stands at about £146million and the council is spending £15million a year on loan charges.

Ms Davidson said: “This is the first year we have built any council houses, although they are in low numbers – two batches of 50.

“The prospect of public money is shrinking and will substantially shrink further over future years.

“We have to find ways of levering in private sector money.”

She said discussions with the Scottish Government had been positive and there was talk of the scheme being implemented throughout Scotland.

It is thought that rents under the SPV would increase to an average of £75 a week, as opposed to an average council rent of just under £60 a week.

The homes would be built throughout the Highlands, where much of the region has been granted “pressured-area status”, preventing new tenants from buying their council houses.

Steve Barron, the council’s director of housing and property, said: “It is a way of building extra houses without borrowing any more money, without losing rights of management or allocation.”

Councillors at the housing and social work committee meeting on Wednesday will be asked to agree to housing officials building a business case for the scheme.

Gordon MacRae, head of communications and policy at Shelter Scotland, the housing and homelessness charity, said: “There’s still some way to go with the Highland proposal and important questions to be addressed – in particular about how the council will continue to meet its obligations to homeless people and the nature of the tenancies.

“We would welcome the chance to talk to the council about their plans.”