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Haringey Council to invest £1bn in housing over five years
London’s first so-called “Momentum council” is set to invest around £1bn in housing over the next five years following the removal of the Housing Revenue Account (HRA) borrowing cap.
Haringey Council’s cabinet is tonight expected to approve budget proposals that include £247.5m of capital spending on new housing up to the end of 2023/24, plus £433m on buying new homes for the HRA.
It will also pump £285.3m into its existing stock and loan a new housing company £37m over that period, bringing the total investment to more than £1bn.
An officer’s report to be considered by councillors later said the government’s action to remove the HRA borrowing cap in October “will support us in fulfilling our commitment to deliver at least 1,000 new council homes at council rents by 2022 and build our own housing on our own land”.
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The council intends to borrow £493m through its HRA to fund its ambitions.
It was also awarded £62.8m in grant for council housebuilding by the Greater London Authority (GLA) in November.
Labour-run Haringey Council changed administrations at the May 2018 local elections following controversy over the previous cabinet’s plans for the Haringey Development Vehicle – a 50-50 regeneration joint venture with developer Lendlease. A number of councillors opposed to the vehicle were elected, with those who supported it either voted out or stepping down.
Councillors are also set to scrap manifesto plans to use a wholly owned housing company to deliver its promised 1,000 social rent homes.
Thanks to the absence of the borrowing cap, those homes will now be delivered through the HRA instead, with the company used for intermediate or market products not eligible to be held in the HRA. The council has no current plans to build market-facing homes, but will hold the company as a vehicle to do so should it develop these plans.
An officer’s report said delivering through the HRA would mean “less complex governance and accounting; lower rates of borrowing for the HRA than can be achieved for some work through the company; and (significantly) the opportunity to use surpluses from existing HRA income, not needed for the maintenance of existing stock, to support further subsidy for new homes”.
The authority will also seek registered provider status for a subsidiary of its company in order to deliver homes funded by grant from the GLA.
Barking and Dagenham Council approved a similar move last week.
Haringey Council is currently updating its housing strategy, and the cabinet was today asked to approve an interim update expressing its preference for social rent affordable homes over intermediate products such as affordable rent and shared ownership.
