Norwich City Council to vote on liquidation of wholly-owned housebuilder

A housebuilder in Norfolk is set to be liquidated just five years after it was bailed out by a local authority.

Lion Homes, previously known as Norwich Regeneration Limited, is to be wound up after years of losses, with Norwich City Council liable to lose up to £10m.

The council is the only shareholder in Lion Homes having invested around £3.4m in the business, according to its latest accounts, and loaned it £6.1m.

No accounts have been filed by Lion Homes since the end of 2023. The previous four years of accounts show losses in the hundreds of thousands annually, ammounting to total losses of £4.4m over the period.

Companies House published a first notice for liquidation for Lion Homes in May over failure to file its accounts. The notice was subsequently removed, but accounts are yet to be filed.

In May, Peter Richard Prinsley – who was last year elected as MP for Bury St Edmunds and Stowmarket – stepped down as chair of Lion Homes board and was replaced by Dr Kevin Joseph Patrick Maguire.

At a Lion Homes shareholder meeting on the 17 June 2025 the panel agreed “reluctantly but unanimously recommend to Cabinet that Lion Homes (Norwich) Limited should undergo a solvent winding up by way of a Members Voluntary Liquidation process.”

A Norwich City Council cabinet vote on its liquidation will be held on 9 July, according to council documents.

The local authority had commissioned a report into the viability of Lion Homes, stating in council documents that “changing and challenging circumstances” as well as “recent changes within the economic environment” have had “adverse impacts upon the company’s business plan”.

Leader of Norwich City Council, Labour councillor Mike Stonard, previously sat on the board of Lion Homes but resigned in July 2023.

The business, which was set up to help Norwich City Council meet its housing needs, struggled to pay off debts despite the intervention of the local authority in 2020.

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Green Party councillors proposed in January 2024 that the Labour-majority Norwich City Council should bring Lion Homes in-house, but this proposal was voted down.

Green councillor Alex Catt said: “The Labour-run city council has known about the impending collapse of Lion Homes for a very long time indeed. Since the council spent £6m of our money to bail it in 2020 it has never once been profitable. In the last four years for which accounts have been filed it has made a loss of £4.4m. As the council has yet to declare the losses for the last two years we can safely assume that the final figure will be very significantly higher.”

He added: “The sheer arrogance, incompetence and lack of openness displayed by the Labour councillors who have overseen this disaster that has led to this enormous loss for the public has been striking. There needs to be a full and public investigation into how this was allowed to happen, and a plan from the council for how it will deliver housing for Norwich at value for money after this failure.” 

In 2020, papers submitted to the council cabinet revealed the firm faced imminent liquidation if the council didn’t agree to its request for over £10m in loan funding and the purchase of £3.5m of equity.

Difficulties for the business arose over a loss-making 1,000-home Rayne Park development started in 2017. The scheme, which included a 70-home Passivhaus development, had been forecast to result in losses of £10.4m if the council didn’t step in.

In a statement, Cllr Carli Harper, cabinet member for finance and major projects at Norwich City Council, said: “Councillors will consider the future of Lion Homes at a cabinet meeting on 9 July. The company has come to the end of its current phase of building work.

”This, along with changes to the economic climate and rules regarding council borrowing to build homes, makes it the right time for councillors to consider how best to ensure the provision of new and affordable housing for Norwich now and into the future.

“The recommended option is a controlled winding-down of the company. This would represent the best outcome for the city council, as the sole shareholder, and importantly for our residents and taxpayers. Agreeing this type of formal and controlled process is called ‘Members Voluntary Liquidation (MVL)’ which would allow the council to ensure everyone owed money would be paid before it officially shuts down.”

Cllr Harper told Housing Today: “Lion Homes’ historic financial challenges have been well documented. Norwich City Council has always maintained a reserve to mitigate the financial risk associated with the company and this has been increased as the challenges facing Lion Homes increased in recent years. In addition, Lion Homes has significant assets which will help mitigate losses incurred by the council.”

The Lion Homes website is no longer functioning and attempts to reach its teams for comment by Housing Today were not responded to by press time.