Re-establishing the council's housing programme to increase the provision of social housing in Sefton (Sefton Council)

Housing Advisers Programme case study

2021/22 cohort 

In 2021, Sefton Council agreed a strategic case to re-enter the social housing market and establish a housing programme to provide much-needed social rented homes within the borough.

Whilst the aims and objectives had been identified, the council recognised that its resources were limited, and without specialist advice and expertise from external consultants it would be unable to develop a Business Plan and housing programme that it could implement.

The council appointed external consultants to produce a business case, option appraisal and business plan and required a preferred option that would deliver a housing programme to increase the provision of affordable, rented homes within the borough.

Through interviews, consultations and assessing various delivery models against 14 criteria including Strategic Fit, Council Control, Viability, Social Value and Balance of Risk, the preferred delivery model, scored and chosen by the Council is to directly deliver homes via the council’s General Fund. This option would entail acquiring newly built homes (preferably from its development subsidiary - Sandway Homes) and primarily for social rent and under the auspices of the council’s direct operations.

The first units of the council’s housing programme are due to be completed by Sandway Homes in 2024. To facilitate the acquisition and onboarding of these properties, the business plan identified that the Council would need to:

• Procure and appoint a managing agent/RP - as the Council does not have the resources to manage housing stock internally.
• Register as an Investment Partner with Homes England – to obtain grant funding as the Council’s financial resources are finite.
• Appoint further external consultancy support – provide expertise and resources to support the acquisition and onboarding of future schemes (as needed).

The Business Plan and initial phase of the Housing Programme shows promising results, with positive cashflow predictions and the ability for the initial scheme to repay the capital and management costs from its rental income.

Beyond this initial phase, there would be a finite number of units the Council could acquire with the remaining financial resources available. The Council may need to prioritise schemes based on its capital resources, and those which best meet its aims and objectives in increasing the provision of social housing within the borough.

An option for the Council, is to subsidize the growth of the programme with the provision shared ownership units, where the sales receipts are reinvested to fund additional homes. However, to grow the Housing programme beyond this, the Council would need to seek external loan finance. The Council would be unlikely to grow the programme to exceed the limit of 199 units within HRA, as it does not wish to obtain loan finance at this time.

Lee Payne, Investment and Housing Services Service Manager, Sefton Council: [email protected]