Several plots of land owned by the Leicester City Council have been sold for £1 each as part of Peter Soulsby’s plans to bring more housing developments to Leicester. The property transactions were kept secret until council bosses released the details of the shocking property transactions agreed under the Community Asset Transfer (CAT) scheme since 2011 when the reigns were first passed to Sir Peter Soulsby as he was elected as Leicester Mayor.
Under the CAT scheme, councils can sell assets which aren’t worth the cost of maintenance for nominal sums as low as £1, at the cost of local taxpayers who pay council tax which contributes to the maintenance of such areas. By selling the land for ridiculously low amounts to developers means the developers are quids in as they secure an eye-wateringly good deal on the land and then make nearly 200 thousand times the amount they spend on the land upon the sale of the homes whilst Leicester taxpayers are left to foot the bill. Westleigh Homes’ new development on St Marys Park, Old Saffron Lane, Aylestone sells two bed ‘affordable’ homes for £195’000. Our question to the mayor which goes unanswered is why the taxpayer is being ripped off to allow developers to line their own pockets?
There have been nine agreements to transfer disused land to developers for £1 a time, significantly lower than market value when each plot of land is valued at more than £100’000.
In total 28 acres, which the council says would have fetched nearly £5.4 million on the open market for housing, though Harry Albert Lettings & Estates values it at significantly more, have been sold for a combined total of £9. That leaves the taxpayer out of pocket by £5’399’991, money which could fund our schools, improve road conditions and other infrastructure and fund homelessness services.
As a result, housing developers/associations have agreed to build 273 homes which have been used to house people on housing waiting lists, however, the housing associations collect the rent and none of this is remitted back to the council or into the public purse. So, not only have housing associations made significant value gains in buying land at below market value (at the cost of £1 per plot) and get the full reward of selling the properties on the land, they also get the full benefit of the entire amount of rent each month for the social housing tenants who have moved into the rented units.
The mayor says the £1 land sales had delivered social housing that would have cost the council tens of millions of pounds to build, however, we argue this would not be the case given it has not cost the housing developers tens of millions of pounds to build. Surely, Peter Soulsby should have the financial literacy to shop around and secure the best development deals?
Sir Peter said;
These transfers of our land at a nominal fee have been an excellent way of adding to our city’s affordable housing stock.
But this is at the cost of taxpayers who don’t have access to this affordable housing stock. He continues;
“With around 6’000 people on our housing register, these homes are very much needed, and help to ensure a decent place to live for some of our most vulnerable citizens. They have been built on council land that is no longer needed for other purposes,” though it hasn’t been used to build council houses, “so it’s a tremendously effective way of bringing land back into use,” at the cost of the taxpayer, “bringing investment into the city and ensuring we get homes built that would have cost us £29million to build ourselves. This is just one of the methods we have been using to ensure more affordable housing is built in Leicester.”
“We have also sold land for market value – for example, at St Mary’s allotments, where the developer [Westleigh Homes] and their housing association partner [Midland Heart] are building 70% of the 87 new homes on the site as affordable housing – far in excess of the 20% planning rules say they must build. We have also just announced that we will also be building council houses ourselves again,” but not on the ones that cost tens of millions of pounds to build, “launching our own housing company, Housing Leicester Limited. It will start building new council homes across the city from spring 2019.”
The plots of land sold with the council’s valuation and the area of land sold are as follows:
- Manor Farm Phase One (Hamilton): 4.21 acres – Council value £1.8m | Sold for £1
- Manor Farm Phase Two (Hamilton): 1.35 acres – Council value £650,000 | Sold for £1
- Benbow Rise Phase One (Braunstone): 1.45 acres – Council value £150,000 | Sold for £1
- Benbow Rise Phase Two (Braunstone): 0.9 acres – Council value £100,000 | Sold for £1
- Benbow Rise Phase Three (Braunstone): 2.16 acres – Council value £0 (true value of at least £200’000) | Sold for £1
- Humberstone Depot, The Portway: 0.51 acres – Council value £150,000 | Sold for £1
- Saffron Lane Velodrome: 2.83 acres – Council value £800,000 | Sold for £1
- Queensmead, Hamelin Road: 1.28 acres – Council value £150,000 | Sold for £1
- Heathcott road (Saffron Lane: 13.21 acres – Council value £1.5m | Sold for £1
- Erskine Street (City Centre): 0.65 acres – Council value £101,500 | Sold for £1
This follows a string of scandals engulfing the Leicester Mayor, Peter Soulsby in the last year, including:
- Handing over £10million to Travelodge to open a second, unneeded hotel in the city in what is believed by many to be a backhanded deal seeing funds go into Peter Soulsby’s own pocket and in spite of the dozens of struggling, independently owned hotels and B&Bs.
- Greenlighting the use of £400’000 of taxpayer funds to buy back homes sold under Right to Buy whilst claiming the council was building their own new council homes.
- Paying the Haymarket Consortium’s (a for-profit, private company) maintenance bill for the next ten years.
- Selling the old New Walk Council Offices, worth over £9million, to Sowdens (developers) for £24’000.
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