A council’s housing company will create “positive outcomes” totalling nearly £1million, bosses have said.
A report before South Kesteven District Council’s companies committee has revealed all of the 25 homes on the Wherry’s Lane build had either been sold or were in the process of being sold.
Documents leaked unintentionally by the council in October had shown an expected loss of £132,000 on the development, the first project carried out by SKDC’s company.
The build by the arms length private company includes 20 apartments and five townhouses.
However, in January, bosses had argued there would be financial benefits.
In the report next Tuesday, Gravitas Housing director and chief finance officer at SKDC Richard Wyles said: “It can be seen that all properties have either been sold or are in the process of being sold and there are no properties now available for sale.
“It is anticipated that all sale receipts will be received by no later than mid May 2022.”
Councillors will be shown an updated profit and loss account however, unlike the one in October, this has not been published publicly and will be kept as an exempt document.
“The longer [than anticipated] sale period has had an adverse financial impact on the overall project as ongoing holding costs have been incurred,” said Mr Wyles’ report.
“However the marketing campaign was severely affected by the national lockdown that was introduced shortly after the units became available for sale.”
Among the list of positive outcomes there are:
- £504,000 Section 106 payments to be used towards funding affordable housing nearby
- £174,000 in interest rates on a commercial loan between the council and Gravitas
- £107,000 in charges from the council to Gravitas to reimburse for officer time spent on the project
- An estimated £6,000 council tax income since 2020/21
- £188,000 of New Homes Bonus income to the council
The project had originally hoped to budget for a £243,000 profit from the built meaning the £132,000 loss projected in October was £375,000 out.
Opposition councillors, having seen the budget projections – which included more than £397,000 extra spending on building and selling – have previously called the project a “shambles” and criticised it for building “unaffordable” private housing rather than council houses.
They have accused the council of wasting time and effort on the build.
However, bosses stated the aim of the build was to develop where other private companies and developers wouldn’t – delivering towards housing targets and stimulating growth in the district.