Second council housing company requests loan repayment extensionHow did North Yorkshire Council’s companies perform last year?North Yorkshire housing companies estimate end of year profits

Two North Yorkshire Council housing companies are estimating to report a profit by the end of this financial year.

Brierley Homes and Bracewell Homes are expected to post improved performance after completing further sales, according to a council financial report.

Both companies were taken over by North Yorkshire Council in April 2023.

Bracewell, which is a former Harrogate Borough Council firm, is forecasting a profit return of £1.52 million by the end of 2023/24.

A report said the company had seen sales of shared ownership properties and the “receipt of rental income on the proportion retained within the company”.

However, it added that Bracewell was still awaiting the completion of purchasing a further two sites.

It said:

“The main challenge for the Company relates to receiving accurate information from developers.

“Bracewell is due to complete on house purchases at two sites this financial year however neither developer has managed to achieve their initial forecast completion dates.”

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Meanwhile, Brierley Homes, which was set up by the former North Yorkshire County Council, is forecasting a profit of £959,000 by the end of the year.

The figure is based on the company completing sales at sites in Marton cum Grafton, Pateley Bridge and Great Ouseburn.

Meanwhile, the firm is expected to start work on another housing site in Kirby Malzeard this year.

It comes as the council reported a “positive outlook” for the company in March amid an increase in sales.

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

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.”

Harrogate councillors approve transfer of council-owned companies

Councillors have approved the transfer of Harrogate Borough Council’s wholly-owned companies to the new North Yorkshire Council next month.

HBC’s Conservative-run cabinet met last night at the Civic Centre to discuss a report written by the council’s head of legal and governance, Jennifer Norton.

The report recommends that leisure company Brimhams Active and housing company Bracewell Homes are passed over to the new council on April 1.

Harrogate Borough Council will be abolished on March 31 after being in existence since 1974.

The next day, a new unitary council for the whole of North Yorkshire will be created to deliver all the services currently delivered by Harrogate Borough Council and North Yorkshire County Council.

Wholly-owned companies

Brimhams Active launched in August 2020 when it took over control of leisure centres and swimming pools in Harrogate, Starbeck, Ripon, Knaresborough and Pateley Bridge.

It has overseen major projects such as the redevelopment of the Harrogate Hydro swimming pool and the construction of new facilities in Ripon and Knaresborough.

The new council will add Selby’s leisure services to the Brimhams Active portfolio from September 2024.

This will be whilst it undertakes a £120,000 review of leisure services with the aim of creating a countywide model for delivering leisure and sport by 2027.

Bracewell Homes was set up in 2019 with the aim of turning the council a profit and delivering affordable homes.

It is expecting to deliver 43 homes by the end of 2023/24, which will exceed its target of 40 homes by 2024.

North Yorkshire County Council already has a housing company called Brierley Homes and what will happen to Bracewell inside the new authority is unclear.

‘They’ve done very well for Harrogate’

At last night’s meeting, Conservative council leader Richard Cooper said the two companies have done “very well” for the soon-to-be abolished authority. He said:

“This to me seems very much like a tidying-up exercise, things that we need to do, belt and braces, in order to make sure that the transfer of borough council-owned companies transfers smoothly to the new North Yorkshire Council.

“I hope they will look after them because they’ve done very well for Harrogate Borough Council thanks to the expertise of the officers who have been guiding them.”

Cabinet members Sam Gibbs and Stan Lumley did not take part in the discussion or vote as they sit on the Brimhams Active board.

County council to set up new estates company

North Yorkshire County Council looks set to establish a new property company to look after its estate.

Under plans outlined in a report due before the council’s executive, the new firm would be established with £200,000 working capital backed by a loan.

It would also see the authority’s current estates company, Align Property Partners Limited, operate on a commercial basis.

The new firm would be wholly owned by the council and would transfer to North Yorkshire Council from April 1.

As part of the plan, the company would adhere to “teckal” exemptions – meaning the council could directly award it contracts without open procurement.

Vicki Dixon, assistant director for strategic resources, said in a report that the current firm, Align Property, was “well-placed” to operate commercially.

She said:

“A substantial market exists for the services provided by Align, with the company well placed to capitalise on its existing reputation in the commercial space.

“The growth is being driven by non-NYCC externally generated income and indicates that Company trading aspirations have outgrown the initial Teckal-based operating model.”

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Ms Dixon added that the new company’s function would be to “continue providing high quality property, highways and estates services to the council and associated bodies, while being Teckal compliant”.

Senior councillors will discuss the plans at a meeting on Tuesday, February 21.

The move comes as the new North Yorkshire Council is set to take control over a host of district-council run companies.

Brimhams Active, the arms-length leisure firm, and Bracewell Homes – both of which are owned by Harrogate Borough Council – will transfer over to the new authority on April 1.

The county council has previously been criticised for the performance of its own companies after its Brierley Group of firms reported losses in recent years.

Harrogate district’s leisure and housing companies ‘will transfer’ to North Yorkshire Council

Harrogate Borough Council has confirmed its leisure and housing companies will be transferred to the new North Yorkshire Council, but questions remain over what will happen thereafter.

Brimhams Active and Bracewell Homes were launched in the last three years with the backing of just under £11 million from taxpayers.

The borough council said in a statement this week that “there are no plans to change how they’re currently run, albeit they will transfer” when the authority is abolished next April.

This comes as council officers from across North Yorkshire are working together on county-wide plans for how all services will work when they come under the control of the new North Yorkshire Council.

Currently, housing and leisure services across the seven districts are run in different ways through arm’s-length companies, management firms, charity trusts and by the local councils themselves.

Councillor Carl Les, leader of North Yorkshire County Council, said the correct decision-making process would be followed for the future of services and that he would not be drawn on whether it would be better to scrap the current set-ups.

He said:

“Leisure and housing are two of our work streams going forward for the next 10 months and it would be wrong to try and prejudge what recommendations are going to be made for the new council to adopt.

“These are two important issues and we recognise that Harrogate has companies doing these pieces of work.

“But this has to be fed into our ongoing work which will then give recommendations to the executive and wider council.”

Brimhams Active launched last August when it took over control of leisure centres and swimming pools in Harrogate, Starbeck, Ripon, Knaresborough and Pateley Bridge.

‘New vision’

Harrogate Borough Council hailed the move as a “new vision for the future” of services and said it would save around £400,000 a year through business rates relief and VAT benefits.

Councillor Pat Marsh, leader of the council’s opposition Liberal Democrat group and Brimhams Active board member, said the company has so far been a success despite challenges with covid closures and staffing shortages:

“Several local authorities have stopped even providing leisure services, it is not a compulsory service.

“Setting up Brimhams Active has meant the council continues to offer and develop the service for the benefit of our residents.”

However, Cllr Marsh was less praiseworthy of Bracewell Homes which launched in 2019 with the aims of turning the council a profit and delivering much-needed affordable homes.

She said:

“I had hoped that Bracewell Homes would deliver social housing, but that has not happened. It was never the kind of housing company that I was arguing for.”

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Confirming both companies will be transferred to the new council, a Harrogate Borough Council spokesperson said:

“We are working collectively with the county council and neighbouring district councils to ensure a smooth transition to the new authority on 1 April.

“Part of this work involves looking at local authority controlled companies such as Brimhams Active and Bracewell Homes.

“Decisions on what they might look like in the future will be made by North Yorkshire Council.”

Harrogate council housing company Bracewell Homes won’t pay any dividends this year

Harrogate Borough Council has insisted its housing company is performing well despite it not paying any dividends this year.

Bracewell Homes launched two years ago with the aims of turning the council a profit and intervening in Harrogate’s pricey property market to deliver much-needed rental and shared ownership homes at affordable prices.

Its developments are Horsa Way, Dishforth and The Willows on Whinney Lane in Harrogate.

It was set up with the backing of a £10 million loan from taxpayers and the council had budgeted to receive £267,000 in dividends this financial year.

However, the council has now said it won’t receive any of this money in a revelation which sparked questions over whether Bracewell Homes is underperforming.

Speaking at a meeting on Monday, Cllr Pat Marsh, leader of the opposition Liberal Democrat group, questioned if the dividend shortfall was being addressed as she said the company should be a benefit to the council and not a “drain” on its finances.

‘Extremely profitable’

But Paul Foster, head of finance at the council, responded to say 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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According to documents filed with Companies House, Bracewell Homes had £459,565 in the bank as of March 2021.

Mr Foster also told Monday’s meeting that the council does not only benefit from the company through dividends, but also through cash coming from other areas.

He said: 

“There are three elements that the council benefits from Bracewell Homes – there is a recharge of staff salaries, interest charges on the loan that the council made to the company, and a payment of a dividend if the company is able to.

“The first two continue and we are still making money out of the company in that regard.”

40 properties by 2024

Since it was set up Bracewell Homes has so far acquired 26 homes and sold 22, which means it is on target to meet its initial aim of delivering 40 properties by 2024.

But with house prices continuing to soar and around 1,700 households on the council’s housing waiting list, there have been calls for the company to set much higher ambitions.

Cllr Marsh previously told the Local Democracy Reporting Service that the company should be aiming to deliver “hundreds” of homes to ensure low-income earners can afford to live in Harrogate where average house prices paid rose to £395,526 in 2021.

Cllr Marsh previously said: 

“Forty homes in three years will barely make a dent in the need for the 1,700 on the waiting list, some living in very difficult circumstances.

“We need Bracewell homes to set targets to achieve hundreds of houses per year otherwise this crisis will never come to an end.”

How has the Harrogate council’s housing company performed during the pandemic?

When Harrogate Borough Council’s commercial housing company launched in 2019 it was hailed as an exciting opportunity to turn the authority a profit and help first-time buyers get a foot on the property ladder.

Two years and a global pandemic later – how is Bracewell Homes performing and is it what the district needed?

Backed by an up to £10 million loan from taxpayers, the at arm’s-length company was set up to intervene in Harrogate’s pricey property market by delivering desperately needed rental and shared ownership homes which are affordable to low-income earners.

And with around 1,700 households currently in the queue for social housing and the district remaining as one of the most unaffordable places to live in England, the scale of the task at hand could not be clearer.

That is why Cllr Pat Marsh, leader of the opposition Liberal Democrat group on Harrogate Borough Council, believes the company should be setting much more ambitious targets than its initial aim to deliver 40 properties by 2024.

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Bracewell Homes has so far hit 14 properties either sold or nearing completion but councillor Marsh said this figure needed to be reaching the “hundreds” if the district is to ever become a place where many low-income earners can afford to call it their home.

Speaking to the Local Democracy Reporting Service, she said: 

“Forty homes in three years will barely make a dent in the need for the 1,700 on the waiting list, some living in very difficult circumstances.

“We cannot continue to rely on affordable housing being delivered by developers, they are a part of the solution but until they start to develop their land the supply will not be kept at a level required.”

A council spokesperson previously said while Bracewell Homes had a successful launch, the delivery of properties had been “slightly slower than anticipated”.

The entrance to the Castle Hill Farm development on Whinney Lane.

In August last year, senior councillors agreed to purchase 52 homes in Pannal Ash at a cost of £4.5 million with 16 of the properties to be sold under shared ownership by Bracewell Homes and the rest made available for social rent.

The company had also earmarked other sites in the district to develop, including Frogmire in Knaresborough.

As well as shared ownership and rental properties, Cllr Mike Chambers, the council’s cabinet member for housing and safer communities, said the company also saw the renovation of existing properties as a way of improving the prospects of people being able to buy their own home.

His comments come after the Local Democracy Reporting Service last month revealed that 774 homes across the district have sat empty for more than six months, prompting calls for greater action to bring vacant properties back into use.

Cllr Chambers said:

“We want to do everything we can to ensure local people have the opportunity of a decent and affordable home in the Harrogate district.

“We know getting a foot on the housing ladder in the Harrogate district can be a challenge.

“That’s why we have established Bracewell homes to acquire shared ownership homes, renovate existing properties and/or sites for development, as well as owning and letting rental properties.

“By doing all this we can be confident that the homes provided by Bracewell Homes are of a high quality, fit for purpose and will allow local people to stay local in the future.

“Any financial return can be invested back into providing more high quality homes and council services.”

When Bracewell Homes launched, it was agreed that the company would be shut down if it were to run at a loss and waste taxpayers’ money.

A council spokesperson said while the company’s 2020/21 accounts were still being finalised following the end of the financial year, the profit after tax figure for 2019/20 was £129,953.

They also said the company had another 25 properties in the pipeline over the next year and on top of the 14 homes already delivered.

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Despite the profits and seemingly on target delivery figures, Cllr Marsh repeated her belief that Bracewell Homes should be setting far loftier ambitions if it is to have a major impact on the housing market, as she also said a different approach with a greater focus on construction could be taken altogether.

She said: 

“We Lib Dems were first to push for a housing company with the hope to create a company that would build social housing as many other local authorities had done. We were very shocked to learn once it had been set up that they could not be proactive and build social housing.

“The disappointment with Bracewell Homes is the emphasis, at the moment, on building homes to sell at market prices to get a commercial return on money invested.

“Maybe there is a need to look at two companies – one commercial and one for social housing.

“We would have liked them to look at lifting the borrowing cap on the housing revenue account, as many councils have done, to start a very proactive social housing building programme.

“We need Bracewell homes to set targets to achieve hundreds of houses per year otherwise this crisis will never come to an end.”

Snapshot: Harrogate’s unforgiving housing market

The coronavirus pandemic has caused an unprecedented economic shock across the UK, closing businesses and putting people out of work.

But despite this, house prices are on the up – even in areas where there has been a drop in sales.

In Harrogate, average house prices last year reached £331,580 according to latest figures from estate agents Hamptons.

That figure is around 11 times greater than the average annual income of workers in our area.

Government pledges to boost affordable housing have been redoubled by Harrogate Borough Council which set out in its Local Plan that almost 4,400 affordable homes are needed over the 2014-2035 plan period.

To hit this target, the council has promised to put pressure on housing developers to bring forward more lower-cost homes at building sites across the district.

Harrogate Borough Council plans £10m homes boost

Harrogate Borough Council is looking to loan its housing company Bracewell Homes £10m to invest in shared ownership homes.

A report is due to go before HBC’s cabinet next week to rubber-stamp the move, which would see the authority make more investments like its recent unprecedented £4.5m spend on 52 homes on Whinney Lane.

With shared ownership, people buy between a quarter and three-quarters of a property from the council but then have the option to buy a bigger share in the property at a later date. The scheme is aimed at people who don’t earn enough to buy a home outright.

The council sees shared ownership as a way for people earning a modest salary to get on Harrogate’s notoriously unforgiving housing ladder.

HBC’s draft housing strategy 2019-24 said the town was one of the most unaffordable places to live in England, with average house prices around 11 times the median annual income of people who work in the town.

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HBC asks housing developers to include 40% “affordable” housing in every development, which can include shared ownership homes.

When the council formed Bracewell Homes in 2019, a key part of its business plan was to purchase affordable shared ownership homes from developers, as it is doing on Whinney Lane.

With several major developments planned for the district over the coming years, HBC now says it wants to accelerate these types of investments.

Bracewell Homes has also earmarked other sites in the district to develop, including Frogmore in Knaresborough, on vacant and derelict land behind some council homes.

A council spokesperson said:

“The report going to cabinet next week is to seek approval for Bracewell to borrow £10m to acquire properties. If approved, this will include 16 shared ownership at Whinney Lane.

“Bracewell Homes has sold three properties and offers accepted on a further six.”