Issue - meetings

9.1      There was discussion about how the GLA were managing risk. The bank had also undertaken due diligence on J49 and believed that they were a suitable company for a loan, which had been agreed. Funding for the project was conditional on the GLA, the bank and the social housing regulator being in agreement. Officers acknowledged that the project was not without risk but there had been a lot of due diligence by the three parties.

9.2      The housing management function was discussed.  The social housing regulator would be responsible for this and would have to provide an annual business plan, rent setting, and prove many other management skills. Most importantly they must provide support to those renting the properties.

9.3      There was discussion about how money would be provided for the project. Members were advised that Section 106 money would be given in two tranches to J49, which is a non-profit making company, set up for the good of the public. J49 would be providing social housing and working with a charity. Members received information as to what would happen if J49 defaulted on the bank loan.

9.4      It was noted that Lewisham had a strong tradition of working with its third sector and other organisations for the benefit of the public. A charity was providing land, a mechanism for providing social housing had been set up and all for the benefit of Lewisham residents with Lewisham allocating the places. Although there were risks, the project was being set up for the benefit of disadvantaged local residents. The collaboration with Bench was also positive news. 

9.5      Councillor Krupski expressed her concern about whether the mortgage payments that the company would have to pay would be secure against the rental value of the properties and whether the client group being allocated to the property would be able to afford the amount of money needed to ensure that the company could pay their mortgage. She was advised that the units would have to be managed in a way that was cost effective ensuring that rent and income was collected. This was part of the steady state position which would be after the development position Lewisham would be involved with and the social housing regulator would have complete ownership of this at that time. They would have to provide an annual business plan, rent setting, prove that they could manage voids and give support to people if necessary; this was a primary role. With regard to those with complex needs, and unable to pay rent, they would be moved on and the housing unit allocated to someone else. A lot of the management structure should flow from their skills as a registered provider and as a social housing organisation. If all regulatory standards were met, this client group should be managed successfully.