£35m plans for social housing in city unveiled

Apr 14 2010 by John Hill, The Journal

A NEWCASTLE house builder has unveiled plans to spend £35m on hundreds of new social homes to meet growing demand in the city.

Leazes Homes is tasked with building developments on donated city council land. Homes are then partly sold to private developers to raise funds to provide social housing on the remainder of the development.

Chairman Bill Midgley said last night: “We want to be the principal provider of social housing in the North East. There isn’t a shortage of land in Newcastle. We have a programme for two years and we could go up to 10.”

Leazes was set up last April as a subsidiary of Newcastle City Council’s council house manager Your Homes Newcastle. While the land is secured at no cost from the council, Leazes Homes is also able to tap into funding from the Homes and Communities Agency. It aims to provide up to 350 new social homes for the city over the next two years.

Leazes has completed three projects so far with developer Bellway Homes. The Homes and Communities Agency has provided funding for a 15 two-bed bungalow scheme at Apsley Court, Kenton, and an eight two-bed development at Souter Court, Coxlodge.

A ten two-bed bungalow project at Coach Road, Throckley is also managed by Your Homes Newcastle. All of these new homes have been let to tenants.

Your Homes, which was set up to manage the city council’s social housing in 2004, says demand for social rented homes is “growing exponentially”. It expects 200 to 300 applications for each two to three bedroom house through Your Choice Lettings.

Mr Midgley said: “Given the difficulties for young people in borrowing, there’s even more demand for social housing. The recession has increased the demand for social housing that can’t be met at the moment.

“There are 31,000 local authority homes within the city. Go back a few decades and there were 44,000. Most of the Right to Buy homes were family homes, three-bedroom semis, but a lot of them are now in single occupation, occupied by parents whose children have left home. They will only relocate if they go into a modern property, not high rise developments.

“We’re building two-bedroom modern bungalows, and if we can persuade them to move to our properties, it frees up the three-bedroom homes.”

Mr Midgley, a former chief executive of Newcastle Building Society, says the private-social housing split on these developments ranges between 60% and 40%, depending on the scheme. But with development finance harder to find he says developers are attracted by the prospect of being able to buy completed homes from an organisation whose costs have been reduced by access to funding and donated land.

He said: “We have an agreement with companies such as Barratt or Bellway. We will sell back to them an agreed proportion of the properties that they then sell on.”

He added: “From a private sector development point of view, we’re keeping their building skills together at this point in the market. The property market’s going to pull back and they can be in a position to take advantage of the upturn when it happens.”

Leazes Homes is developing six sites in Throckley, Walker, Kenton, Gosforth, Walkergate and Walbottle, three are in the pipeline at Blakelaw, Kenton and Walker.