Government agrees £65m debt write-off for council homes transfer
The government has today agreed to write off £65.1 million of debt to allow a council to transfer 8,500 homes to its former arm’s-length management organisation.
Salford Council hopes to transfer the properties to Salix Homes under new stock transfer rules, published last November, including an offer to cancel historic housing debt.
In exchange for the write-off, Salix Homes has committed to invest £75 million to bring all properties up to the government’s decent homes standard by 2020.
This will include 4,000 kitchen or bathroom upgrades, 3,000 heating upgrades and new windows in 2,000 homes.
The deal will be put out to consultation before a tenant vote later this year. To benefit from the debt write-off, the whole process must be completed by March 2015.
Kris Hopkins, housing minister, said: ‘Today’s deal is great news for Salford’s residents, unlocking £75 million to invest in bringing their homes up to a high standard.
‘I’m pleased to sign this deal with the council and write off £65 million of their historic housing debt, so they can put the offer to their tenants and so Salix can plan ahead for the investment they have committed to making.’
Gloucester, Lewisham and Durham councils are also considering stock transfer using the debt write-off offer. Gloucester received approval for £50 million of debt to be written off in April, while Durham was promised £130 million would be written off in March.
Stock-holding English councils took on £21 billion of debt under self-financing reforms in April 2012. In many cases, this debt means transfers would not be possible without support.
