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Agenda item

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.

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 care home, and the family didn’t have the money available to renovate the home to bring it back into use.
  • Lendology had worked with councils across the country on similar schemes.
  • It was felt by some that the scheme should be extended to social housing providers.

 

In summing up, Councillor Andy Graham stated that the scheme would be reviewed constantly, and that it was a new and proactive scheme that had the ability to help the district’s supply of houses.

 

Councillor Andy Graham proposed accepting the recommendations. Councillor Alaric Smith seconded this proposal, which was put to the vote and agreed by Council

 

Council resolved to;

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

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

 

 

Voting record- For 34, against 4, abstentions 1, did not vote 0.

 

Supporting documents:

 

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