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Council aims to liquidate housing company and end tenancies after missed loan repayments
A local authority is seeking to wind up its wholly owned housing company, potentially affecting around 90 tenancies, after its financial position became unviable.
In February, Reading Borough Council wrote to tenants of Homes for Reading to consult them on the future of the company. The consultation exercise ended on 31 March.
Homes for Reading was set up in 2016 to buy properties and let them at market rents. It had been funded by loans from the council, but has been unable to keep up with repayments, with council reports showing two missed instalments in September 2022 and March 2023.
The company has not added to its portfolio since 2019.
The council previously commissioned Savills to evaluate ways forward for the company. Its preferred option is to liquidate Homes for Reading and transfer its properties into its main stock, where the homes would be made available to key workers and let at affordable rents.
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The move would legally require the properties becoming vacant before they can be transferred into the council’s Housing Revenue Account. This means around 400 people, including children, will need to find somewhere else to live.
A petition delivered by residents to Reading Council’s policy committee on 22 April described the local authority’s position as “callous and unjust”.
“The council claim that this is a good finance strategy which will minimise risk to their finances,” the petition said. “They have shown no regard towards the human beings currently living in these homes.”
A response by Ellie Emberson, lead councillor for housing at Reading Council, said it was “regrettable that the original vision for Homes for Reading of offering long-term stable homes is in our view no longer viable for the long term”.
She added: “We are committed to helping all tenants find suitable alternative homes if the decision to end their current tenancies is taken.”
Ms Emberson said that as and when the decision to wind up Homes for Reading was taken, the council would contact all affected tenants and work with them around next steps for their household, based on an assessment of their needs.
The council has said that it will only take vacant possession once Homes for Reading’s existing tenancies expire, with some not set to end until 2026.
A spokesperson for Reading Council said: “Following the consultation with tenants, we have re-engaged consultants to look carefully at all the financial options which may be available.
“This work has been commissioned to review some specific comments received during the consultation and to ensure the council’s current financial position is fully considered before a decision is made.
“In light of this, we anticipate a decision during the second half of May, which will be conveyed individually to tenants as soon as it is made.”
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