COUNCIL chiefs have approved the spending of £50,000 on legal and financial advice as part of their plans to launch a local housing company to provide affordable privately rented homes.
As the Observer has previously reported, Wychavon District Council has begun the process of setting up the firm which would see the council building homes for the first time since it sold all its housing stock in 1994.
Under the plans, Wychavon will be the only shareholder of the independent housing company and will transfer council owned land over to the firm.
The company would then be responsible for planning applications, development of the sites and managing the properties.
Council chiefs said they were forced to directly intervene in the private rental market due to the district’s above average house prices forcing many residents into renting.
This has led to increased rents and fewer privately rented homes being available.
The process of setting up the firm began last month, but at a full council meeting last Wednesday councillors approved £50,000 being taken from the council’s New Homes Bonus pot of cash to be spent on legal and financial advice.
Speaking at the meeting, Coun Lynne Duffy, Portfolio holder for Resources, said: “At the last Executive Board we were given delegated authority to set-up a company which will fill a gap in the market for quality, fair market rental properties.
“Council is asked to approve the use of the £50,000 New Homes Bonus to enable us to obtain legal and financial advice which we need to set up this housing company.
“The rules surrounding council owned companies are complicated and we need to ensure we do not breach any legal or tax rules.
“It is expected we will initially need to use £11,000 and the remainder will be used to test the business cases as they come forward.”
