Croydon Council this evening (Monday) approved a £25m investment in more affordable housing via a new independent charity that guarantees cheaper rents for local people.
Last month the council’s cabinet agreed the setting up of an independent charity provisionally called Croydon Homes to rent out 340 local homes costing 65% of the usual private rent. This £25m allows the council to fund Croydon Homes’s purchase of another 250 properties on the open market.
At Monday’s cabinet meeting, the council gave approval to a £25m revolving fund to be loaned to Croydon Homes, which then buys the 250 properties and rents them out to local people. Croydon Homes repays the council through the rent it receives, and will receive extra investment money from the council in stages as more properties become available.
The move means that a two-bedroom privately rented flat in Croydon at £1,380 per month would instead cost £900 through Croydon Homes. Tenants would also get a three-year contract instead of the usual six months with a private landlord.
As well as setting affordable rent levels, Croydon Homes will also be able to prioritise housing for borough residents. Croydon Homes will be able to use around £30m in Right to Buy sales receipts, and the overall scheme will save the council up to £1.2m on its temporary accommodation costs.
Councillor Alison Butler, deputy leader and cabinet member for homes, regeneration and planning, said:
“Renting privately is expensive for many Croydon people, which is why this council is taking action to make it more affordable for them. I look forward to seeing Croydon Homes buy its first properties.”