Out-Law / Your Daily Need-To-Know

Sutton Council votes to apply for housing zone status and set up development company to build homes

10 Jul 2014, 5:35 pm

Sutton Council has voted to apply to the Greater London Authority (GLA) for housing zone status and to set up a development company to allow it to build both council and private homes and participate in regeneration schemes.

The Council proposes to build new homes for the first time since 1989, using both its Housing Revenue Account (HRA) and a new development company to be owned by the Council and funded by borrowing under the Council's General Fund.

The HRA will be used to build council houses on previously identified sites as quickly as possible, through a £15 million borrowing facility and £5 million in reinvestable funds from the sale of 100 homes under the government's Right-to-Buy scheme. The sites include sheltered bungalows at Richmond Green in Beddington and a former youth club at Fellowes Road in Carshalton which are earmarked for redevelopment into family homes; Ludlow Lodge in Wallington; and several small sites of former garages.

The Council also proposes to set up a wholly-owned development company which can borrow money from the General Fund and will be able to invest in private sector, private-rented sector, joint venture and regeneration schemes as well as building council houses. Development partners will be commissioned to bring forward housing development through both investment routes.

The proposals were approved at a meeting of the Council's strategy and resources committee on 7 July, at which it was also agreed that an application should be made for housing zone status under a scheme launched by the mayor of London and the chancellor of the exchequer in June.

Under the housing zone scheme, 20 housing zones with relaxed planning restrictions will be set up across London and receive a share of £400m in loans from the GLA and central government. The loans can be used towards the cleaning up of brownfield sites and the delivery of infrastructure in order to allow rapid development. Local authorities applying for housing zone designation must identify sites that can supply a minimum of 1,000 homes.

Speaking at the meeting, leader of Sutton Council Ruth Dombey said: "This is a hugely exciting opportunity and I think we should welcome it. There's a lot of work still to be done but I think it does give us an opportunity to think about how we can provide the sort of housing that our residents deserve under our own terms, and the idea that we can unlock some of the land hoarding that's going on makes this even more exciting."

The deadline for local authorities to submit bids for housing zone designation is 30 September 2014.