First Harlow residents set to move into Burnt Mill development
Harlow Council / Mon 17th Feb 2025 at 01:38pm
THE first Harlow residents are set to move into the 172-apartment Burnt Mills development shortly. Harlow Council acquired the development last year when news broke that Newham Council were close to buying the block for temporary accommodation for families from Newham.
In order to buy the site, the council was supported by market-leading financial, legal and property specialists. The apartments are now being advertised to rent with many local residents already having viewed the apartments and expressed their interest.
The council says that the deal was struck without incurring debt to the council which saw the council acquire the entire development for £56.6 million – below the market value of the development which was determined by a strict valuation.
The acquisition has been financed through which a pension fund pays the long-term cost of the acquisition, recouping their money through a portion of the rents. The strict financial modelling of the acquisition sees the council making a profit nearly every year of the next 50 years, even once the pension fund has taken their portion of the rent and all other costs such as maintenance have been met.
Therefore, the council could not have used the finance for any other purpose as it had been secured against the property. In short, this means that the funding for the development did not come from the council, but the council will benefit from the revenue of the property.
All 172 apartments are available for Harlow people with 52 of the apartments about to be advertised directly to people on the council’s waiting list and the remaining 120 apartments already being advertised on the market for local residents.
Since buying the development, the council has been working through the requirements to occupy the building, including the completion of construction work and registration with the Building Safety Regulator. During this time, the council has not lost any money against the long-term financing as the requirements do not commence until occupation.
Commenting on the news the Leader of Harlow Council, Cllr Dan Swords, said: “Last year, Newham Council were set to buy this cutting-edge development to use for temporary accommodation for families from Newham. We worked around the clock to not only block that deal but in fact turned it completely around to ensure that every single one of the 172 apartments is available for Harlow people. However, it is more than that – we did so without incurring debt to the council and below the market value of the development.
“That is a significant achievement, and this development will create a huge revenue for the council, just as the Harvey Centre has. It would not have been possible to use the finance required for the development for anything else as the deal is very carefully structured meaning the council has not incurred any debt.
“With the first residents set to move in shortly, this is a fantastic news story for our town and one that everyone can be proud of. I know that no resident would underestimate just how challenging it has been to turn this around from a position of Newham Council about to sign the deal to Harlow residents moving in.”
Peter
2025-02-17 14:13:24
On the face of it this seems good news for the people of Harlow. So we now know what the cost of the building is, an average of £329 000 per unit not withstanding the cost also includes retail units. Is this a good deal, I really have no idea. But the comment about not incurring debt to the council is a puzzle. Surely a pension fund, which has to maximise returns to its members, will require guarantees as to the level of income it will receive. If such guarantees are in place do they not constitute a liability that the council has to fulfil, not withstanding that the council should receive future rental income. And presumably the pension fund (is it a UK scheme?) will have a debenture over the property should the council not be able to fulfil its obligations. My comments don't mean I am criticising the deal but rather the rather simplistic reporting of it. Rachel Reeves wants pension funds to invest more, can some of the deal be attributed to Labour policy.
David
2025-02-17 14:34:24
Lost count how many times the council claimed residents will move in shortley. Believe it when I see it.
Alan Hall
2025-02-17 14:37:28
Peter - it is quite normal for pension funds and other large scale institutions to fund social and market housing, the latter of which forms 70% of the dwellings - although this is usually for housing association developments (Councils usually borrow money from the Treasury-backed Public Works Loan Board - PWLB). Such institutions view them as safe investments with fairly guaranteed income, notwithstanding some allowances for voids, bad debts and (mainly) repairs/maintenance. The council is saying that the rental income is greater than whatever is the agreed return to the pension fund and the Council’s running costs - and I don’t think there is any reason to doubt this. Again, the Council should be able to make a reasonable estimate of these over the long term. I actually think Harlow Council is to be congratulated on achieving its objective of securing these flats for Harlow people.
gary roberts
2025-02-17 16:01:13
What a great deal: or is it? Again apparently homes for Harlow people is used but only 52 will be taken from the housing needs register if they can afford the rent and council tax. All the other flats will be on the open market that many Harlow residents' cannot afford. Cllr Swords told me last year that they were ready for occupation so why the delay? £56.6m for 52 flats? Homes for Harlow people? Smoke and more smoke that I hope the Harlow Labour group will dig and dig deep to get answers on the financing of this project. I would suggest all of the flats will end up as buy to let in say 6 years with a big debt to the council and Harlow people footing the bill.
Dan
2025-02-17 16:12:24
Mr Roberts, you are entirely wrong. All 172 apartments are available for Harlow people instead of 172 apartments for Newham Council as the case was set to be. They can't be sold as the whole development is within an LLP meaning no apartments can be sold and can only be rented. 52 affordable apartments is the first policy compliant development in Harlow since Labour's Local Plan in 2020 because of viability. If there were more, it would not financially stack up because not enough rent would be received. Therefore, it would not have been available at all. Surely that is a good thing? One day I am sure you will welcome the fact Harlow Council stood up for our town, secured this development and have ensured all homes are for Harlow people.
Seamus
2025-02-17 16:21:04
It says Harlow residents will move in soon but doesn't clarify if they are from the social housing waiting list or as people who have just rented at market price. Why is it that getting information out of the council is like getting blood out of a stone? It shouldn't be lke this.
Dan
2025-02-17 16:27:13
Seamus - the article literally says "All 172 apartments are available for Harlow people with 52 of the apartments about to be advertised directly to people on the council’s waiting list and the remaining 120 apartments already being advertised on the market for local residents."
Nicholas Taylor
2025-02-17 16:51:44
Two questions Dan. Firstly do the council tenants have a secure council tenancy? Secondly, do those offered one of the 120 flats have to meet the same requirements, including "Harlow Homes for Harlow people" as those offered from the Housing Register?
gary roberts
2025-02-17 17:29:02
Mr Taylor I think we both know the answers to your questions: No!
gary roberts
2025-02-17 17:37:54
Cllr. Swords please tell me what I got wrong in my original comment? I also wonder if Newham council were ever interested in the block? Do you have any evidence to support the claim?
Jasper
2025-02-17 17:54:20
I'm still puzzled at how Harlow council allowed Newham council to get so close to signing up. Surely a development like that would have people asking questions as to who was building it and who would occupy it. I fancy the truth was the council hoped it would go through without too many questions being asked. Not very trustworthy hiding behind the usual smoke and mirrors they are good at.
Dan
2025-02-17 18:11:28
Nich - yes, all 172 apartments are for Harlow people Gary - they took it through their Cabinet with approval to buy it for temporary accommodation in December 2023. Jasper - Harlow Council didn't "allow" - it is a private development. A council can't dictate who you sell your house to, it is exactly the truth. When the council found out, they stepped in to buy it.
Jasper
2025-02-17 18:42:33
If I was to build a 12 storey block of flats you would want to know the ins and outs of it. How can you believe a council who choose to hold more meetings behind closed doors. Look at the state of the town, its dreadful.
Nicholas Taylor
2025-02-17 19:33:47
Dan, so they have had to live in Harlow for 7 years? And what about the tenancy type, are they secure tenants?
Tez
2025-02-17 20:12:40
None are advertised for rent on the oipen market, i have looked over every letting agent and council and nothing no where, when i did call the coucil i was told the rent would be around £1500 for a 2 bed and £1100 for a one bed so hardly affordable housing
Peter
2025-02-17 23:02:07
Alan Hall, I didn't criticize the deal because I really have no idea whether it is good or bad. What I want to know is does the council have any liability (it being reported that it doesn't)? If I managed the pension fund involved I would want to ensure that if occupancy rates were low I would still receive enough income to give an adequate return. The scheme is only for Harlow people, if there are not enough Harlow people what happens, will properties stay empty, will they go on the open market, will rental prices reduce to attract locals. Your opinion would be appreciated.
Adam
2025-02-17 23:15:00
I bet those 52 low cost apartments ruin it for the others.
Peter
2025-02-17 23:22:56
Back in December YH published a story that the flats were now being marketed with a link to Right move. This link has been removed. So just how will these flats be let? Will it be purely through the council? YH also reported that the flats were now called Millbrook house, I notice that in July 2024 a new limited company was formed Millbrook (Harlow) Ltd, presumably there is a connection, the registered office is the Civic Centre. Is this usual for a transaction of this nature? There still seems to be questions to be answered.
Guy flegman
2025-02-18 08:09:05
I would only question if the pension company is a uk pension company or foreign one. I often find property owned by foreign pension companies and this is just more money leaving the UK which adds to our trade deficit and thus reduces GDP per capita which is the root of our problems as a nation.
D.E
2025-02-18 08:18:05
Some much needed homes for local people. Let's just take that as a real positive for Harlow shall we and leave it there. Be happy :)
Stuart
2025-02-18 09:26:56
How can the council guarantee the flats that are on the open market only go to Harlow residents? If they're being advertised on the market how can you stop people who don't live in Harlow from applying? I don't think there's a legal way of doing that?
Derek Clark
2025-02-18 09:50:04
Well done Harlow Council, a well thought out plan to secure homes for Harlow people, this is something that takes a lot of planing and time and I can see why it's taken this long. One thing is for sure, had we been under a Labour Council, Newham Council will have filled it a long time back, at that would be very sad for the people of Harlow
PJ
2025-02-18 12:36:52
Could the council please confirm that before residents are moved in the footpaths and cycle track around this building will be reinstated? No work has been carried out in over six months on the pathway making it dangerous to travel to the station or this block of flat. Or are the new residents expected to travel only by car.
Stuart
2025-02-18 13:59:16
Derek - short memory! Surely all the other Harlow blocks filled with London overspill happened under a Tory council didn't they? It's the Tories that have a proven track record of letting that happen in Harlow.
Seamus
2025-02-18 14:25:02
Dan you said "Seamus - the article literally says "All 172 apartments are available for Harlow people with 52 of the apartments about to be advertised directly to people on the council’s waiting list and the remaining 120 apartments already being advertised on the market for local residents." I think you've been in local politics too long as you're using the words of suggestion over fact. It's claimed 52 flats will only be offered to those on the existing Harlow council waiting list. There has not been any clarification if anyone of those 52, transfered onto Harlows list from other boroughs. The "all 172 apartments are available for Harlow people" is a bit of a suggestive unrealistic claim. After the 52 removed, there will be 120 flats available to anyone, absolutely every one. Lastly, can you confirm which pension fund has purchased the building and can you confirm the rumour that Harlow council has used Harlow council employee's pensions for this purpose?
Thomas Abbott
2025-02-19 13:09:13
I've been issued section 21 can't find place to move
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