Liverpool Council's failed housing company, Liverpool Foundation Homes, may not repay outstanding loans until next summer, years after the authority first announced plans to shut it down. New documents reveal two loans the company holds with the city council may not be settled until August 2027 at the earliest.
Company closure announced in 2022
In October 2022, the council's cabinet announced the decision to close its “flagship” housing company, describing it as “no longer viable.” The decision was taken to wind down the programme, which had developed just 18 properties despite a promise to deliver 10,000 new homes under the scheme.
An investigation in August found Liverpool Foundation Homes remains operational, still owning and managing several properties across the city. The company was originally supposed to have shut down four years ago.
Financial losses and loan details
According to the Caller Report, the company posted a loss of £700,000 on a turnover of £300,000. Of the 18 properties originally held since 2018, the city council still owns and manages 16, as confirmed by Cllr Nick Small, cabinet member for growth and economy.
Foundations sold two of the 18 homes for a collective total of £390,000, triggering an immediate partial repayment of the loans secured against them and reducing the outstanding loan balance owed to Liverpool Council.
Repayment deadline extended
A motion on the company was put before the city council on Wednesday by the opposition Liberal Democrats. Cllr Carl Cashman's motion described the company as a “complete failure and a waste of taxpayer money.”
Addressing full council earlier this week, Cllr Small said a decision had been taken to pause the sale of the remaining homes until property values improved through a rent convergence plan, but any vacant houses would be sold on the open market. It is still anticipated the housing stock will be disposed of and the company liquidated.
The housing company has two outstanding loans due to the city council, both with a repayment deadline of August 18, which has passed. An amendment to the Liberal Democrat motion revealed a new deadline of August next year for the loans to be settled.
Company remains solvent
Liverpool Foundation Homes holds £3.7m in tangible property assets but owes a total of £3.1m. The company remains solvent via direct financial backing from Liverpool Council.
The Labour amendment passed on Wednesday evening set out how cabinet members will report to relevant scrutiny committees regarding the ongoing strategy for Liverpool Foundation Homes, including rent convergence and property value changes.
