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6th Jul, 2022

Council chiefs rule out buy-to-let housing option

COUNCIL chiefs are set to look at further options before getting involved in the district’s housing market.

Earlier this year Stratford District Council agreed to the principle of establishing its own housing company as a way of helping build more affordable homes.

But following a report into the financial implications, council chiefs have ruled out forming a company based solely on buy-to-let and funded through borrowing following a number of concerns.

These included the “high housing cost” in the district compared to the “moderate rental return” on affordable homes, which would not make it financially viable. Other factors included the council’s limited land and financial resources.

Council leader Tony Jefferson said: “The reality is that the returns are limited and the risks high. We have to act responsibly with taxpayer’s money.”

But his deputy Mark Cargill said other options were available.

Coun Cargill added: “The review undertaken has been beneficial in helping us to understand better the challenging housing market in which the district council wishes to operate.

“It demonstrates that, given our high housing costs and moderate rental return in the affordable sector plus our limited land and financial resources, borrowing costs would preclude making sufficient financial return solely on a buy to let basis and that could harm the council’s investment.

“The council remains committed to delivering its own affordable homes, but will not put taxpayer’s money at risk.

“It is apparent to me that we now focus on other development areas not contained within this report such as gaining external funding and partnering with external organisations.

“Whatever happens, it will happen quickly.”

The council’s cabinet will consider the way forward on Monday (November 5).

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