PLANS to use £2.4million of Right to Buy cash to help address the need for more affordable homes have been announced by Leicester City Council.
The city council intends to purchase the Zip Building, on Rydal Street – close to the city centre, for around £5.55million. The three-story building consists of 58 flats and bedsits which will be added to the council’s own stock of affordable housing.
The purchase will be part-funded by £2.4million of cash from the sale of council properties under the Government’s Right to Buy scheme. This is the maximum allowed under the current rules. The remainder will be through permitted prudential borrowing, which is common for investments of this type, and allowable debt.
Rental income from the properties will be reinvested into maintaining and improving council housing stock.
The majority of the units (47) within the Zip Building are one-bed flats and bedsits. The remaining units are a mix of two-bed flats – including two wheelchair accessible properties – and three- and four-bed cluster flats. The council will invest up to £550,000 in improvements to the building, including remodelling two of the cluster flats into separate, self-contained flats.
The planned purchase will help meet the growing demand for one and two-bedroom affordable housing across the city.
The city council has negotiated the contract so that all existing tenancies can be honoured until Summer 2023, to help minimise disruption.
Cllr Elly Cutkelvin, assistant city mayor for housing said: “There is a desperate need for more affordable housing in the city.
“There is no doubt that the Right to Buy scheme has hit the supply of council housing hard. We’re losing homes much faster that they are being built and it’s time the Right to Buy scheme was abandoned. We have been forced to sell thousands of council houses over the past 30 years.
“That makes it absolutely vital that we invest our Right to Buy cash receipts back into addressing our local and critical need for more affordable homes.”
Whenever a council property is sold under Right to Buy, the proceeds of the sale must be used in line with strict Government guidelines. This means that only some of the proceeds can be used to support the costs of building and/or acquiring new affordable homes.
Each year, Leicester City Council loses an average of 400 council homes through the Right to Buy scheme. Over the last forty years, the city council’s housing stock has been reduced from 36,000 to 20,000 homes.
As part of its work to address the huge demand for affordable housing in Leicester, the city council has purchased 595 properties to be used as council homes since April 2019, at a cost of around £74million.
The Zip Building dates back to around 1900 and was built to the designs of regionally renowned Stockdale Harrison for Thompson & Co wholesale boot and shoe manufacturers. By the mid-20th century, it had been converted into a hosiery factory. The building was redeveloped as residential accommodation around 12 years ago.