Each of the 249 homes in Colindale is expected to save the council around £3,500 per year on temporary accommodation costs, reports Simon Allin, Local Democracy Reporter

Barnet Council is set to buy 249 homes from a developer to let out to residents at affordable rates.

Senior councillors have agreed to acquire the properties, on the latest phase of the Colindale Gardens development, from housebuilder Redrow.

Set to be offered at London Affordable Rent levels, the homes will make up almost a quarter of the council’s overall target to deliver 1,000 new affordable homes by 2026.

Barnet is the second-largest London borough by population but has the sixth-lowest stock of social housing. It currently has more than 2,200 households living in temporary accommodation – and the number is rising, pushing up costs for the council.

The acquisition was agreed during a meeting of the council’s cabinet on Monday. Ross Houston, cabinet member for homes and regeneration, described it as “a very good deal”.

He added: “It allows us to deliver these homes at London Affordable Rent. It allows us to in effect flip 87 shared ownership and 29 private homes into London Affordable Rent homes and deliver a key manifesto commitment.”

Each of the homes is expected to save the council around £3,500 per year on temporary accommodation costs. Given current high interest rates and inflation, the council says the cost of building the homes itself or buying them individually would be “significantly higher” than the proposed purchase.

But council reports reveal there are risks attached to the plan, which is set to increase the net debt of the housing revenue account (HRA) – a ring-fenced budget used to manage the authority’s housing stock – to £873.5million at the end of its 30-year business plan.

This could make the HRA less resilient to future cost pressures – and if interest rates continue to rise and rents remain capped, it could go into deficit.

Under questioning from Conservative opposition councillor Peter Zinkin, Cllr Houston explained that the £873.5m figure was the “overall headroom” for the HRA and insisted the purchase was a “remarkably good deal”.

Cllr Zinkin pointed out that 72% of the homes set to be purchased are two-bedroom properties, which council reports admit “may be more challenging to let”. He said there was more demand for three-bedroom homes, which are set to make up 19% of the acquisition.

Cllr Houston replied that there was an increasing need “across all tenures but also all sizes of accommodation” and gave assurances that all the units would be filled. He also pointed out that 40 of the homes would be wheelchair adaptable.

According to the reports, the HRA risks could be lowered by “reducing the capital works programme, re-profiling works into future years, reducing service levels through focusing on priorities [and] reducing cost allocations for corporate overheads from the general fund”.

The council also plans to apply for grant funding from a housing programme set up by the government to support refugees from Afghanistan and Ukraine.

The acquisition is expected to be formally completed with an exchange of contracts with Redrow by the end of June. Most of the new homes, which will be managed by council housing arm Barnet Homes, will be made available for rent starting in October 2023, with the rest following in January 2024.

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