Leicester City Council has spent £5.55million on a former factory building, which had already been converted into flats, that it plans to turn into affordable housing.
The council has bought the Zip Building – in Rydal Street, close to De Montfort University and the Leicester Royal Infirmary – under plans originally announced last year. It said the 58 flats and bedsits would help address the “urgent” need for more affordable council housing in the city.
It has been helped by £2.4 million of cash from the sale of council properties under the Government’s Right to Buy scheme – the maximum allowed under the current rules. The remainder is through a mix of permitted borrowing and allowable debt which, it said, was “common for council investments of this type”.
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Refurbishment of the three-storey former factory, which will provide 58 affordable homes, is underway and the first council tenants are expected to be able to move in next spring.
As well as one bed flats and bedsits, there will be a mix of two-bed flats – including two wheelchair accessible properties – and three and four-bed cluster flats, some of which will provide support to help people with independent living.
Coun Elly Cutkelvin, assistant city mayor for housing, said: “The acquisition of the Zip Building will help meet the increasing demand for one and two-bedroom council housing. But we still face a desperate need for more affordable housing in the city.
“The Right to Buy scheme has hit the supply of council housing hard. We’re losing homes much faster that they are being built and it’s time the Right to Buy scheme was abandoned. We have been forced to sell thousands of council houses over the past 30 years.
“That makes it absolutely vital that we invest our Right to Buy cash receipts into schemes like this, which help addressing the critical need for more affordable homes.”
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A council spokesman said: “Whenever a council property is sold under Right to Buy, the proceeds of the sale must be used in line with strict Government guidelines.
“This means that only some of the proceeds can be used to support the costs of building and/or acquiring new affordable homes.
“Each year, Leicester City Council loses an average of 400 council homes through the Right to Buy scheme.
“To help address the local housing crisis, the city council aims to help provide an additional 1,500 affordable homes in the Leicester by 2027.”
The Zip Building dates back to around 1900 for Thompson & Co wholesale boot and shoe manufacturers. By the mid-20th century, it had been converted into a hosiery factory and was redeveloped as housing around 12 years ago.
As part of the sale negotiations for the building, the city council agreed that all previous tenancies should be honoured until the end of summer 2023, to minimise any disruption.