Issue - meetings

Provision of an Empty Property Lending Scheme

Purpose

To consider a loan provider for owners of long-term empty properties who need financial support to bring their properties back into use.

Recommendation

Subject to the resolutions of the Executive on 12 March 2025, Council is recommended to:

1. Approve a capital investment of £300,000 to create a lending pot.

2. Approve an initial set up fee of £30,125.

Additional documents:

Minutes:

The purpose of the item was to consider a loan provider for owners of long-term empty properties who need financial support to bring their properties back into use.

Councillor Andy Graham stated he would be proposing the item, but asked Councillor Alaric Smith to introduce it as he had worked on the details of the project.

Councillor Alaric Smith, the Executive Member for Finance, introduced the item, highlighting the following;

The report set out a proposed initiative to put vacant homes into use.
An initial financial investment of £300,000 would be used to create lending pot for repair work to put these properties into use.
Lending would be at a favourable rate.
The scheme was aligned to the Council’s priorities.
Should the scheme be approved, it would be for a one year trial period and loans would be available in the coming months.
The scheme was to be delivered in partnership with Lendology, a not-for-profit social enterprise lender.
At the end of March 2025, there were 1,128 properties in the district which were empty, and 125 had been vacant for over two years. As many of these homes required financial investment to make them habitable, the scheme would help meet local housing need.

Members asked the following questions for clarity.

Whether there was a cap on the scheme. The Executive Member explained that the maximum loan amount would be considered in the development of the scheme, but that the indicative average loan amount was £20,000.
How cost would be recovered if a borrower defaulted on a loan. The Executive Member stated that Lendology would be responsible for collecting the debt and had processes in place, having worked with other councils on similar schemes.
Whether social housing providers would be able to utilise the scheme. The Executive Member explained that the scheme was currently intended for individual homeowners only.

In debate, members raised the following points;

Another member of the Executive stated that in discussion with Lendology, it was clear that they would not secure loans against the property, utilising instead other protections such as restrictions on the owners’ legal title. Lendology had very low default rates in other areas of the country.
Whether £20,000 was sufficient. The Executive Member stated that as this was indicative, the final details would need to be worked out with Lendology.
The item had not gone to the Overview and Scrutiny Committee. The Executive member stated that the Committee’s workplan was the responsibility of that Committee, and it could have looked at it as a pre-decision scrutiny item if it had wished to.
It was stated that temporary accommodation was an expense for the Council, and the Council was likely to make a saving if individuals were placed into permanent accommodation. However, there was no restriction on what would happen to the homes after refurbishment.
The scheme was welcomed by some for being an imaginative solution.
The scheme could be used in situations such as when an individual has passed away or moved into a ... view the full minutes text for item 247

Meeting: 12/03/2025 - Executive (Item 311)

Webcast for 12/03/2025 - Executive

311 Provision of an Empty Property Lending Scheme PDF 75 KB

Purpose

To consider a loan provider for owners of long-term empty properties who need financial support to bring their properties back into use.

Recommendations

That the Executive resolves to:

1. Agree to partner with Lendology for the administration of loans subject to legal agreements being implemented for an initial period of one year.

2. Agree that loans are for the sole purpose of bringing empty properties back into use.

3. Delegate authority to the Director of Finance to approve the level at which interest is to be set on a loan repayment.

That the Executive resolves to recommend to Full Council to:

4. Approve a capital investment of £300,000 to create a lending pot.

5. Approve an initial set up fee of £30,125.

Additional documents:

Minutes:

Councillor Alaric Smith, Executive Member for Finance, introduced the item. The purpose of the item was to consider a loan provider for owners of long-term empty properties who needed financial support to bring their properties back into use. Councillor Smith noted that at the end of March 2024, 1,128 properties were registered as long-term empty. Councillor Smith stated that empty properties were a wasted resource and a source of complaints. The Scheme encouraged owners of such properties to carry out essential works to bring these properties back into use. Lendology would provide loans to owners to enable such works to be carried out. Lendology would manage the scheme on behalf of the Council. The Council would set the interest rates for the duration.

Councillor Hugo Ashton, Executive Member for Planning, noted that in the context of the Council’s planning targets it was important that existing stock was brought back into use.

Councillor Alaric Smith, Executive Member for Finance, proposed accepting the recommendations of the report.

Councillor Geoff Saul, Executive Member for Housing and Social Care, seconded the recommendations.

RESOLVED:

That the Executive: