West Suffolk Council owned housing company Barley Homes to receive an extra £5.3 million to develop two sites
A council is to plough an extra £5.3 million into a company it owns to develop two housing sites - one near Bury St Edmunds and the other in Mildenhall.
West Suffolk Council’s Barley Homes would build 118 homes, 30 per cent of which would be affordable, on the two sites that are owned by the public sector estate but their exact location is being kept under wraps.
The authority estimates they would generate a one-off return of up to £3.9 million - on top of the £1.2 million from 63 homes Barley is developing on two sites in Haverhill next year.
The council can continue to make money from Barley Homes through loan interest payments, profits, support services and land sales.
A company business plan, which has not been made available to the public, and funding plans for future developments were presented to the authority’s cabinet on Tuesday.
A cabinet report said an extra £5 million would need to be made available to help deliver the additional two sites and the business plan.
The capital programme for West Suffolk already includes £7.5 million for Barley Homes for the two existing sites.
A £350,000 budget also needs to be set up ‘to fund the council’s share of costs to progress planning applications for the Mildenhall site and also the development of future pipeline sites’.
The report said: “A sale price for each site has been calculated, and should this business case be agreed, the council will proceed with purchasing the partners’ land. Should planning permission be granted, the council will then dispose of the sites to Barley Homes.”
The authority has drafted a risk assessment for the plans but notes in the report that ‘house prices and build costs remain a significant risk to any housing development, and thus the council’s ability to obtain a financial return from Barley Homes’.
It added: “Local, regional and national trends are frequently monitored to evaluate potential changes and how these may impact on costs and levels of returns achievable from developments. Should a significant negative change in trend emerge, options will be assessed to evaluate the way forwards.”
Cabinet backed the plans and they will be discussed by full council on December 17.
More by this authorPaul Derrick