COUNCIL chiefs have revealed plans to launch a local housing company to provide affordable privately rented homes after claiming the market had ‘failed’ Vale residents.
Should the proposals be given the green light, it would see Wychavon District Council building homes for the first time since it sold all its housing stock in 1994.
Under the plans, Wychavon would set-up the independent housing company, but remain as the only shareholder and transfer council owned land over to the firm.
The company would be responsible for planning applications, development of the sites and managing the properties.
Funding for the project would be taken from the council’s New Homes Bonus pot of cash which will reach £6million by 2020.
Council bosses have been forced to intervene to tackle an increased demand for private rentals as residents are unable to get on the property ladder with average house prices in the district almost 11 times the average salary.
More residents are therefore being forced into the private rental market resulting in increased rents and fewer privately rented homes being available.
By building more homes for the private rental market, Wychavon hopes to increase supply and provide more affordable rental properties.
Details of the major proposals were revealed at the council’s executive board meeting last Wednesday where councillors agreed to spend £50,000 on legal and financial advice in order to set-up the housing firm.
Speaking at the meeting, Coun Lynne Duffy, portfolio holder for Resources, said: “The concept of setting up an independent housing company is included as one of our council promises which we said we would deliver by March 2018.
“This will help meet housing demands for our residents and provide a new income stream for the council.
“Seven out of 10 councils are either doing or exploring options to set-up their own housing companies.”
Deputy Managing Director, Vic Allison, said: “Wychavon is the fourth highest in terms of average weekly rent for private rented accommodation.
“We all know that in Wychavon average salaries are nowhere near the fourth highest in the West Midlands so what does that say?
“That says our population are choosing to rent privately, or forced to rent privately and pay more in their disposable income towards their rent then they do in other parts of the West Midlands.
“I think there is a very clear case private rented accommodation isn’t working properly in Wychavon and for those people who prefer to rent, or are forced to rent, the market is failing them and I think the council ought to be doing something about that.”
Council chiefs will now begin the process of setting up the company. Once established they will then look into the business case for the development of the private rented houses.
Councillors will then be asked to approve the funding of the company at a meeting early next year.