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May 2023

Last Updated: 24/05/2023

Politics

Council set to loan £500,000 to Harrogate housing company

by Calvin Robinson Chief Reporter

| 24 May, 2023

North Yorkshire Council is set to loan Bracewell Homes £500,000.

North Yorkshire Council looks set to loan £500,000 to a Harrogate housing company to cover “high expenditure costs”.

Bracewell Homes was set up by Harrogate Borough Council in 2019 but is now fully-owned by North Yorkshire Council following this year's local government shake-up.

It was created to generate a profit for the council and to intervene in Harrogate’s pricey property market by delivering much-needed rental and shared ownership homes at affordable prices.

It is currently marketing two-bed properties at Hughlings Close, Green Hammerton, and two and three-bedroom homes at The Willows on Whinney Lane in Harrogate.

However, the company requires a “drawdown” in order to cover high expenditure going into this financial year.

Council officials said it would cover costs before “high income amounts” are received.

A report due before North Yorkshire Council’s executive on Tuesday will recommend approving the loan.

It says:

“A drawdown of £500,000 is now required urgently in order to pay final invoices on sites that Bracewell are already in contract for.

“The loan will cover the high expenditure costs forecast for the beginning of the year before the high income amounts start to be received.”

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The Stray Ferret asked North Yorkshire Council which sites the loan is designed to pay invoices for and when it expects the sum to be repaid, but did not receive a response by the time of publication.

The move comes as questions have been raised over the performance of Bracewell Homes.

Last year, the company paid no dividends despite the now-defunct borough council budgeting to receive £267,000.

At the time, Paul Foster, who was head of finance at the council, said the company was still “extremely profitable” and that it had continued to sell properties, although at a smaller percentage of shares than expected.

He said:

“The company isn’t able to pay a dividend this year and the reason for that is a proportion of the shared home properties it has sold have been at shares of 25% and 30%.

“It would need to have sold shares of up to 50% for them to have enough cash to provide a dividend.

“In December, four or five properties were sold at a lower share than the company was forecasting and as a result there is less cash in the company.

“The company is not underperforming in particular. It is just not selling the larger shares which make it more cash rich.”

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Council set to loan £500,000 to Harrogate housing company

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