2,000 homes planned as Shropshire Council to set up its own house building company

The Shrewsbury-based authority is recommending that councillors agree to setting up the company at its meeting on December 13.

An outline business case prepared by consultants says that the council could make millions of pounds by building homes, as well as tackling a shortfall in commercial house building in the county.

Under the plans, some homes will be built for sale on the open market, while others will be built for the affordable rental market.

In a report on the plan, Mark Barrow, the council's Executive Director of Place, says that hundreds of homes could be built on land the council already owns.

He says the authority owns land in the north and centre of the county but that any development in the south is likely to require the council buying fresh sites.

Mr Barrow's report states: "An initial analysis has identified council-owned land suitable for the development of circa 700 dwellings across nine sites within the first five years and 1,300 plus dwellings across 12 sites from year five onwards. Further work on other potential development sites and the council's asset management strategy is ongoing."

The outline business case, which was prepared in conjunction with Savills, gives an example of potential profits from building 160 homes in Ellesmere, Oswestry, and Shrewsbury.

It concludes that the homes could raise more than £4.3million for the cash-strapped authority.

Gap in the market

Mr Barrow's report outlines how the council aims to fill the gap in the market left by developers who focus on building large family homes.

It states: "The Local Plan Review of 2017 identified the need to build 28,750 new homes by 2036. Whilst in 2017/18 1,876 new homes were built, private sector developers are focussed on profit maximisation in the 3-5 bed ‘for sale’ market. The evidence is that the market is not, and will not, build the housing needed to meet the broad future needs of communities."

The report also forecasts that the move to start building homes will stimulate the county's economy.

It states: "As well as helping to meet housing need in Shropshire, council intervention in the market is likely to increase overall economic activity, supporting the delivery of investment in new homes. This has a multiplier effect in the local economy, with residents working in local businesses and spending in local shops and on local services.

"It also provides an opportunity to adopt key worker policies to encourage key workers in health, education, social care and other public services to remain or move to the county.

"The council’s primary aim is to address market failure, increase the availability of affordable rented and for-sale housing and to develop housing types that the private sector developers are not building."