19.10.15
Lambeth Council is to go ahead with an innovative plan to set up a new company to address the failure of the private housing market, so that Lambeth can build more homes for local families.
Lambeth's Cabinet has agreed the proposal to establish "Homes for Lambeth", a 100% council-owned and run company that will help meet the election pledge to build 1,000 extra homes for council rent.
Lambeth is facing an escalating housing crisis, with 21,000 people on the waiting list for social housing, over 1,850 homeless families and 1,300 families in severely overcrowded accommodation. However, the Council's ability to help meet the growing need is limited by cuts in Government funding and regulations, including the cap on borrowing and Housing Revenue Account funding and restrictions on spending the money from Right to Buy sales.
The proposed special purpose vehicle (SPV) would enable the council to bring in outside money, including from pension funds, to help pay for its ambitious estate regeneration programme - and reinvest surpluses for the benefit of local people. Under normal circumstances, the 15-20% development profit would go to private developers.
A report to Cabinet argued that, in the face of the housing crisis, the Council had 'a moral and political imperative to build homes ourselves'. Homes for Lambeth would build on the vision of a mixed-income development at Somerleyton Road, in Brixton, allowing the council to build homes for council rent, intermediate rent and private rent, all with long tenancies and rent stability.
The report also pointed out that a number of other councils, including several in London, have used SPVs to deliver new housing schemes.
