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23
Jul
Council approves additional £1.4 million loan to its own housing company
North Yorkshire Council has approved an additional £1.4 million loan for one of its own housing companies.
Brierley Homes, which was founded in 2017 and oversees housing developments across the county including in the Harrogate district, was granted the funds yesterday.
The funding was approved after a council report said the company required “additional loan headroom” to assist with cashflow while it delivered affordable housing and to "allow the company time for sales to be received".
The company currently has six schemes in its housing programme, which would see 248 new homes built — 203 of which would be classed as affordable.
In a report put before Cllr Gareth Dadd, Conservative deputy leader of the council, Vicki Dixon, assistant director of resources, said the decision over the loan was brought forward from August as a matter of urgency.
She said:
It was anticipated for this decision to come forward to executive in August and so it was included on the forward plan but it has been brought forward as an urgent decision to assist in cashflow for the company to ensure that developments can continue and will allow the company time for sales to be received over the next few months.
This will provide the company with additional loan headroom to ensure Brierley Homes can make all payments due in the event of some delayed sales in the coming weeks.
The move comes as the council approved an extension to the maximum loan facility for the company to £25 million in April.
The loan facility was first introduced in March 2018 as a means of funding the firm to construct and sell homes.
Brierley Homes' Yew Tree Farm development at Marton-cum-Grafton.
In February 2020, the company exercised its ability to draw upon the loan facility and was approved £22.9 million to construct and sell homes.
Five years later, the council has made a decision to extend the facility to £25 million.
In her report, Ms Dixon said the new loan was “not envisaged” when the maximum loan facility was agreed in April.
‘Proportionate and necessary’
Ms Dixon added that the loan was “proportionate and necessary” to the company’s affordable housing programme as it was delivering a number of homes above the policy requirement.
According to the report, the firm has six sites across the county which would see 248 homes built.
Of that number 203 would be classed as affordable — which is 127 homes above the number required by policy. The council said the cost for the affordable homes would be £1.341 million.
One of the sites included in the report is in Kirkby Malzeard, where 33 new homes are set to be built on a new development called Laverton Oaks.
The council said the loan will be repaid with base rate interest instead of on commercial terms.
The move comes as Brierley Homes reported a £2.1 million loss for the third quarter of 2024/25 which was largely driven by “delays in the receipt of sales income” and “associated increases in the company’s financing costs”.
A full financial outturn for the 2024/25 financial year has yet to be published.
The company is part of the Brierley Group of 12 companies owned by the council.
It has built homes in locations including Woodfield Square in Harrogate, North Road in Ripon, The Paddocks in Great Ouseburn and Yew Tree Farm in Marton-cum-Grafton.
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