Reading Council set to wind down ‘unviable’ housing company

Reading Council is considering winding down its housing company, Homes for Reading, due to concerns about its viability and loan repayment delays.

A council report from April outlines a list of loans to Homes for Reading, which range from £400,000 to £7m.

The report states that the council did not fulfil its loan repayment obligations associated with Homes for Reading due in September 2022 and March 2023.

In a statement issued in February, the council added that changes to local authority lending rules, the housing market, interest rates on borrowing, and other external factors in recent years have affected the potential viability of the company in the long term.

The local authority’s preferred course of action is to transfer the 101 properties managed by Homes for Reading into the council’s mainstream housing stock.

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The council has said if the homes are transferred, they will be made available “as much-needed key worker homes at affordable rents”.

Homes for Reading was set up by the council in 2016 to buy properties on the open market and let them at open market rents. 

However, to transfer the properties over to the council’s housing stock, there is a legal requirement for tenants to vacate the homes.

The council says it is planning to do this when the current tenancies expire. These agreements end on varying dates through to 2026, depending on the length of individual tenancies.

Reading Council held a consultation with tenants living in Homes for Reading properties, which concluded at the end of March and is now looking through those responses before making a decision.

Tenants presented a petition on the future of Homes for Reading at a council meeting on 22 April, highlighting the concerns of existing residents about their housing situation if the company were to be wound down.

A Reading Council spokesperson said: “As previously stated, we fully acknowledge the impact of this proposal for all Homes for Reading tenants.

“Homes for Reading has been funded by council loans. The company is not currently able to pay back these loans within a reasonable time, which has necessitated the council needing to consider the company’s future viability and options. It is of course regrettable that the original vision for Homes for Reading, is no longer viable in the council’s view.

”This view has been reached after careful consideration of the company’s finances, the risk to wider provision of local council services if no action is taken, and an independent analysis of the options.

The statement added: “We are fully committed to helping all tenants find suitable alternative homes if the decision to end current tenancies is taken.

“We would also emphasise no final decision has yet been made. All tenants will be contacted individually once that decision has been made.”