City of London identifies £84m shortfall in housing investment plans

The City of London has identified a major capital funding shortfall in its 10-year plan for investment in housing.

The corporation is the local authority landlord for more than 1,900 social rented homes and 900 leasehold properties, with stock spread across seven London boroughs.

It has set out a decade-long programme of major works to improve its stock which will require £205m of investment.

According to a report presented to the children’s and community services committee last week, a little more than half of this will be taken up by the Golden Lane Estate.

The £105m that the City plans to invest in the estate, which is located opposite the Barbican and was designed by the same architects, is roughly triple the £29m the committee agreed to spend on it in May 2023.

The report set out the authority’s plans to raise funds through its Housing Revenue Account and identified a major shortfall in meeting its planned investment spend. 

It estimated that £47m could be recovered through recharges to leaseholders, £42m through revenue transfers from HRA, and £32m through HRA borrowing within the boundaries of the prudential code.

This would leave a shortfall of £84m, although the report also noted that its estimates were “high level and based on partial information”, with a “risk of optimism bias”. 

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On this basis it said it would be “prudent” to identify need for an additional £100m of funding “to ensure the programme is deliverable once fully costed.”

According to the report, the City’s ability to undertake wholesale regeneration of its post war estates is limited by the high proportion of leaseholders, the listed status of the Golden Lane Estate and the limited stock into which tenants could be decanted.