Salford City Council is preparing an application to turn its wholly-owned housing development company Dérive into a registered social landlord.
At a meeting next week, the council’s cabinet will be asked to approve the submission of a detailed application to the Regulator of Social Housing (RSH) to register a new Dérive subsidiary, Dérive RP, as a registered provider of social housing.
According to a council report, the council will also be asked to lend £8.485 million to Dérive RP and transfer 104 homes across three sites to the provider subject to the application being accepted.
“A Derive group structure has been established and a preliminary application for the registration of Derive RP – as part of the Derive group – was submitted to the Regulator of Social Housing,” the report reads. “This was approved by the Regulator and the next stage [sic] a detailed application has been developed for submission.”
“The purpose of this application is to satisfy the Regulator of Derive RP’s financial situation, its constitution and other arrangements for its management.”
Dérive was set up by the council in 2017 to increase Salford’s supply of affordable housing. When it launched in 2019, Salford had 6,614 people on its housing list, with 51 bids for every home advertised.
Derive RP initially plans to provide 129 homes across four sites at social rent between January and August 2022 at a cost of £19.917 million.
These homes will be funded through a combination of the £8.458 million loan from Salford City Council, repaid over 40 years through rental income, and grant funding from Homes England through the Greater Manchester Combined Authority.
Dérive RP is expected to be self-financing, with the application forecasting “relatively small surpluses in the first five years with an overall estimated surplus at the end of the 40 years of £1.8 [million]”.
The council’s cabinet will also be asked to approve Derive RP’s appointment of Robin Lawler and Greg Gottig as independent members of its board.
Lawler will chair the board and is the former chief executive of Northwards Housing, Manchester City Council’s recently reintegrated social housing provider. Greg Gottig is chief executive of facilities services company Facilco and has previously served on the boards of housing associations Liverpool Mutual Homes and Torus.
The pair will join as board members deputy city mayors Cllr John Merry and Cllr Tracy Kelly who have experience of leading Salford City Council’s housing portfolio.
Cllr Kelly, Salford City Council’s lead member for housing, property and regeneration, said: “The first 67 Dérive homes were approved in June 2018 and the first residents began moving into their properties in autumn 2019.
“Work is on schedule to complete another 200 plus by summer 2022 creating more than 460 jobs and training opportunities and an estimated £2.1 million extra spending in the local community through families moving into their new community.
“Dérive now accounts for 20 per cent of all planned affordable housing delivery in Salford up to 2023.”
The RSH’s assessment of the detailed application to register Dérive RP as a registered social housing provider is expected to take up to six months.