The group is negotiating with its lenders, Royal Bank of Canada, the Nationwide and the European Investment Bank, to secure £200m for 4000 new homes (see linked story, below). The lenders have agreed to the idea in principle, the group said.
The loss of equity for existing loans would be minimal because all the housing is of low value and would be replaced by high-value homes.
Though there will be a net loss of housing, the housing group has pledged that building work will get under way before any demolitions. Each of its five area subsidiaries has nominated a top priority area for investment within 12 months to demonstrate the group's intent.
A sustainability analysis by Hacas Chapman Hendy before the group's transfer from Sunderland council last year demonstrated robust demand for housing in the city. Each area has undergone analysis of housing, crime, education and health statistics to identify where radical intervention is needed.
We cannot justify spending money on homes that are going to wind up empty
John Craggs, group strategic executive
All the houses to be replaced are outdated types with no demand or are in areas where people "vote with their feet", said group strategic executive John Craggs.
He said the move to replace them with new house types that will attract customers was linked to the group's £480m modernisation programme.
The group could not justify investing in homes with no future, he said. Although about 29,000 tenants are to have their homes modernised as part of the £480m investment, in the rest of the stock it would be money wasted, he said: "You only get renewal money once. It would be criminal to spend it on houses that wind up empty."
Source
Housing Today
No comments yet