Harrogate Borough Council is planning to buy 52 homes at the Castle Hill Farm development on Whinney Lane.
In a report due to be discussed by the council’s cabinet next week, the council says the homes would cost £4.5m in total.
Sixteen homes would be transferred to HBC’s housing company, Bracewell Homes, to be sold under shared ownership, and the rest would be made available for social rent.
Developer Stonebridge Homes has planning permission to build 130 homes at the site. Work is currently under way and the first homes are scheduled for completion in November.
HBC says it could recoup between £1.18m and £2.37m from the 16 shared ownership properties, with the council turning a profit on the purchase after at least 13 years thanks to the rental income.
The council said the shared ownership homes will support first-time buyers in the district.
“The acquisition of 16 shared ownership homes by the council or its housing company will provide a great opportunity to meet high demand from potential first-time buyers in the district and will generate a revenue stream to support council services.”
The council also believes the purchase would help ease demand for socially rented homes as there are currently 1,249 households on the waiting list.
However, the council warned there is “uncertainty” over the medium- to long-term future of the housing market as estate agents in the district report a “pent up” demand for housing following the easing of lockdown restrictions.
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The Stray Ferret asked Stonebridge Homes about HBC’s involvement in the scheme but the company had not responded by the time of publication.
There have been signs locally that, since lockdown, housebuilders are being more cautious with developments. Last month, the UK’s largest housebuilder, Barratt Homes, pulled out of a 390-home development in Littlethorpe, Ripon.
Meanwhile, Banks Group submitted plans for 270 homes and a primary school on the opposite side of the Castle Hill Farm site on Whinney Lane.
Whinney Lane is now closed for seven months due to the construction of two site access points for the Castle Hill Farm housing development as well as a new roundabout.
The manager of the Squinting Cat pub told the Stray Ferret that the closure “could kill” the business.
