Council's investment in commercial property instead of social housing stock questioned

"If there’s a waiting list of over 2,000 at present, does that not indicate under-supply and over-demand?"

WEST Berkshire council’s “speculative” investments in commercial property instead of social housing stock has been questioned, as more than 2,000 people are waiting to be housed in the district.

The council has borrowed £100m of public money to spend on property and hopes to use the £2m rent from tenants each year to spend on public services.

More than £45m has been spent so far, including £17.7m at Newbury Business Park and £3m for Dudley Port Service Station, West Midlands.

But questions over spending priorities were asked by Steve Masters (Green, Speen) last week. He asked how many social housing units would the council’s “speculative, casino-style investment” yield.

Councillor for economic development and planning Hilary Cole (Con, Cold Ash and Chieveley) said that all investments were in line with a strategy to “derive long-term revenue income for the council”.

Mrs Cole added that the council was establishing a joint venture with Sovereign Housing association to provide land to develop affordable housing.

Furthermore, she said that the council was assessing a number of its own sites for “disposal to the joint venture to offer developable opportunity for affordable housing in West Berkshire, in addition to that relied upon through the normal development market”.

Not satisfied, Mr Masters asked whether the council had considered building its own stock of social housing and whether the capital and rents would return a higher rate than the two per cent yield from its commercial investments.

“As I’ve explained, the property investment is agreed by council and that is for a specific income generation,” Mrs Cole replied.

“We are looking at the joint venture.

“This is just one stream of work that we are doing to look at providing housing within West Berkshire.

Councillors heard at last week’s executive meeting that there were currently 2,071 live applications on the West Berkshire housing register.

This was compared to 615 affordable homes built in the district between 2015 and 2018.

The breakdown stands at 109 at affordable rent and 296 for social rent, while 210 were shared ownership, although figures for 2018/19 were not yet available.

Planning permission is in place for a further 800 affordable homes, but these are yet to be built.

Mrs Cole said that council forecasts conducted in 2014 showed an estimated need for 189 affordable homes a year, meaning that the 600 built represented 125 a year on average.

She said: “If all of the permissions were built out, the identified need would be exceeded.

“Therefore the identified housing need is being delivered.”

In response, Mr Masters asked: “If there’s a waiting list of over 2,000 at present, does that not indicate under-supply and over-demand?

“I know that figure of 2,000 is up from 1,800 in November last year.”

“I think you are confusing two things,” Mrs Cole replied.

“One is the number of people who are on the housing register for choice-based lettings and the other is the levels of social housing stock.

“Now, we are not social housing stock-holders. The vast majority of social housing stock in West Berkshire is owned by Sovereign.

“What I’ve given you is the number of completions that we have had, as a district, of social housing over the past few years; and, quite frankly, there are 800 permissions extant, but we can’t necessarily force developers to build these houses and they will do so in their own good time.”

Mrs Cole said that an updated strategic housing market assessment for the district will be available later this month, which would provide an opportunity to see if the housing need had changed.