Liverpool Foundation Homes, the council-owned housing company that Liverpool City Council's Cabinet voted to close in October 2022, is still running and still owes millions of pounds to the authority, a Liverpool ECHO investigation has found.
Launched in 2018 with a promise to build 10,000 new homes and 'radically reshape Liverpool's housing market', the company - known as Foundations - was backed by an estimated £500m investment programme. It committed to building homes for foster families, the elderly, and people experiencing homelessness.
By 2022, however, Foundations had built or taken ownership of just 18 properties, none of which were tenured for social rent. At the Cabinet meeting that year, one member said: "It is clear this didn’t work out as planned." The Cabinet granted authority to discharge legal charges over the properties and facilitate their disposal, with the interim director of finance and resources tasked with writing off outstanding amounts owed by Foundations, conditional on winding-up costs staying within the £1.5m reserve.
Land deals under scrutiny
The ECHO's investigation into Foundations' continued operation began with questions about land deals between Liverpool City Council and a local property developer in 2016 and 2020. Documents seen by the ECHO appear to show the council transferred land to the developer for £1, then bought it back four years later for £650,000 as part of the push to build 10,000 new homes. By 2020, four semi-detached houses had been built on the Birchfield Street site.
This was not an isolated case. In 2021, the ECHO reported that the council had transferred several sites to the same developer for £1, covering more than nine acres across the city, including land on Upper Parliament Street, Church Flags, Tatlock Street, Walton Lane, Hill Street, Northumberland Street, Parkview Road, Oak Lane and Selbourne Street.
Council response
A spokesperson for Liverpool City Council said: "These transactions took place during a period where the Council experienced inadequate governance, leading to government intervention which included reviews of this housing programme. The Council had transferred sites for development and subsequently acquired the homes on completion. This is not an approach currently endorsed by the Council, following a radical programme of improvement and transformation under new leadership."
Asked about the current ownership of the Birchfield Street properties, the spokesperson said: "In 2020, the completed homes were acquired by the Council and transferred at the same value to Liverpool Foundation Homes, in line with Cabinet approval. These homes continue to be owned and managed by Liverpool Foundation Homes, a subsidiary company of Liverpool City Council created in 2018 under previous leadership, as rent-to-buy properties. Liverpool City Council own the freehold interest."
Why liquidation has not happened
Cllr Nick Small, Cabinet Member for Growth and Economy, explained why the company had not been liquidated: "Liverpool Foundation Homes is a council-owned subsidiary company established in 2018 to manage a portfolio of homes delivered through the programme. The company originally held 18 properties and now owns and manages 16 homes. The Council previously reviewed options for the future of the company, including the sale of its assets. However, it was concluded that proceeding at that time would not have delivered best value and could have resulted in a financial loss to the company and, ultimately, the Council. The decision was therefore taken to retain the properties while market conditions improved, helping to protect public funds and secure a better financial outcome for Liverpool residents and taxpayers. The decision still stands to dispose of the stock and liquidate the company, with the Council trying to enact that decision at best value to the taxpayer."
According to LFH's last company accounts, filed in March 2026 and covering the financial year to March 31 2025, the company has posted consecutive yearly losses, including £77,660 in 2025, resulting in accumulated losses of approximately £1m. Financially, Foundations holds £3.7m in tangible property assets but owes £3.1m in total. The ECHO understands the company stays afloat via direct financial backing from the council.
Foundations sold two of its 18 properties for a collective £390,000, triggering an immediate partial repayment of the loans secured against them and reducing the outstanding loan balance owed to the council. LFH has two outstanding loans due to the council, both with a repayment deadline of August 18 2026. Without continuous cash injection, Foundations cannot meet its day-to-day operational expenses using its own resources and depends entirely on the council for immediate daily expenses, on top of the multi-million pound long-term loans.
The ECHO asked the council whether the two loans had been settled by the deadline, which properties had been sold, and to whom. The council did not offer a direct response at the time of writing. In response to a question about which entity manages the Birchfield Street properties, the council said LFH had appointed Redwing, a registered co-operative and community benefit society that manages 'Housing Association real estate'.
