60000 Lancaster households need affordable homes, says new business plan – Lancaster Guardian

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A début business plan for two new housing companies created by Lancaster City Council says 60,000 households across the district have various types of affordable home needs.
They include people in owner-occupied, private rented, social housing and other types of accommodation, states the plan, which is to be reviewed by councillors on the cabinet this month.
The two new companies have been created to develop ‘genuinely affordable’ homes across Lancaster and Morecambe, improve existing housing and work with others, such as developers and architects.
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There is a need for new homes of different sizes and tenures, rent or sale, the business plan states. Energy-efficiency and emissions also need to be addressed.
And the current standard of private rented housing is a concern, the business plan adds.
Lancaster’s 1960s Mainway housing estate and historic Canal Quarter are two locations identified where the new companies want to be active. But there is scope for activity across the district, the business plan adds.
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Lancaster City Council’s cabinet is being recommended to approve the inaugural business plan for the two companies, called Morehomes for the Bay (Investments) Ltd and Morehomes for the Bay (Developments) Ltd.
The Morehomes investment company’s purpose is to increase the number of ‘genuinely affordable’ housing in the area but also improve the offer and quality of private rented homes, the business plan states,
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Meanwhile, the Morehomes development company wants to work with the city council, developers, architects. housing associations and others on projects.
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Both Morehomes companies will have a board of directors and a chairperson. They will be responsible for meeting the busines plan. Most day-to-day operations will be contracted to city council teams. Boards will have at least three directors with relevent knowledge. Over time, extra directors may join from outside the council. Lancaster City Council will be the only shareholder and the secured lender.
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The two local authority-owned companies (sometimes known in councils as LATCOS) were formally incorporated in summer 2021.
Then the initial business plan was prepared by city council officers and approved by the company board of directors in September 2022, and then a Companies Shareholder Committee in October. The business plan now needs to be agreed by the cabinet for final approval and adoption.
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A report for this month’s cabinet states: “The joint business plan sets out the companies’ objectives, governance and management arrangements as well as consideration for how schemes will be brought forward in the future and delivered.
“At this stage, there are no confirmed projects as part of this inaugural plan, although there are clear links to a number of key housing and regeneration priorities which Lancaster City Council has identified in its homes strategy for 2020-2025. A key component is climate change and the ambition to build zero-carbon homes, as well as improving the quality, supply and access of the existing housing.
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“There is much potential in a forthcoming pipeline that could see properties being developed or acquired within the next three years, namely through the Mainway estate regeneration programme and Canal Quarter at an appropriate time.
“Once firmer plans have been established for these and other opportunities, future versions of the business plan will be accompanied with detailed feasibility, modelling and sensitivity-testing on each project.”
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Work at Mainway was expected to be done in phases. The first phase was due to start this financial year and take around 12 months.
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Money for future housing schemes is likely to come from the Public Works Loans Board, a national body which provides funds to councils with favourable interest deals.
The two new city council companies have limited finances at the moment. Under the business plan , Lancaster City Council will be asked to agree the basis and terms for loans made to the two companies.
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The cabinet report adds: “A mechanism to ensure flexibility in drawing funds whilst protecting the interests of the council will be established. A working capital facility will need to be established with the council to support the companies’ day-to-day operations and work to bring forward viable schemes for consideration. The funding facility and draw-down mechanism for the companies will need to be agreed each year, as part of the budget-setting process.”
The Morehomes business plan says ‘economies of scale’ will be essential for the financial viability of the new companies. Larger property schemes of at least 50 homes will be needed. Initially, development schemes with a lower number of properties will not present a viable position. In the longer term, each business case will assess the financial viability of each potential project.”
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At a recent full council meeting, opposition Conservatives claimed councillors on the multi-party cabinet have made some bad or questionable decisions about some commercial properties. Conservatives asked if these could impact on other plans, such as housing upgrades at the Mainway estate or building new homes elsewhere by the council-owned companies.
However, cabinet members defended their work and and said any financial risks linked to commercial property decisions were not comparable with the multi-millions of pounds cuts to core council funding by the Westminster government.
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On the current standard of homes including energy-efficency and emissions performance, the business plan states: “The standard of rented housing, particularly in the private sector, is a concern. We would see that our companies would be intervening in the market, in providing high-quality, well managed and maintained properties, therefore providing competition to other landlords and seeking to drive-up their standards.
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“The city council wants to deliver zero-carbon homes and both the new companies will be contributing to this, in the type of homes developed, acquired and managed.
Cabinet members are also being asked to look at the terms of reference for the two companies, particularly regarding rules for meetings and who presents reports.
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