Abbey Lodge affordable housing redevelopment: Derby City Council

What went in

• Priority area addressed: The primary challenge that this project looked to address was the shortage of affordable housing in Derby, which has led to an increasing number of families living in unsuitable overnight temporary accommodation. The city has experienced a significant rise in homelessness cases, with more than 8,000 applicants registered for social housing and hundreds of families reliant on temporary solutions. This project is designed to provide long-term housing stability and to reduce the financial and social burdens associated with homelessness.
   
• Budget: The project is supported through a combination of funding sources, including allocations from the Local Authority Housing Fund (LAHF), Unringfenced Right to Buy (RTB) receipts, the Hotel and Temporary Accommodation Wraparound Support Fund (HTAWSF) and unallocated Section 106 receipts designated for affordable housing. Additionally, a portion of the financing will come from the capital receipt generated from the future disposal of an adjacent property on the site. The council also evaluated whether the project should be managed under the Housing Revenue Account (HRA) or the General Fund (GF), as each option presents distinct financial implications.
   
• Other resource needed: The success of the project relies not only on financial resources but also on strategic management and delivery. Derby Homes, the Council’s Arm’s Length Management Organisation (ALMO), will provide the property management and maintenance as well as undertaking the Principal Contractor role for the refurbishment work, ensuring that the redevelopment meets high-quality and sustainability standards. Legal and regulatory guidance is also crucial, as the project involved property acquisitions, planning approvals, and compliance with Building Regulations.
   
• Timeframe to completion: The project is structured as a phased redevelopment to ensure immediate benefits whilst allowing for gradual improvements. The first phase involved acquiring the site and bringing the majority of the property back into use as self-contained apartments. A rolling programme of refurbishment and conversion is planned to commence in Spring 2025 with completion within two years giving an overall delivery period of three years. This approach minimises disruption to residents and allows for continuous occupancy whilst upgrades are made.

What came out

The primary outcome of this initiative is the provision of a total of 95 affordable homes, transforming a previously vacant property into a vibrant residential community. The project is expected to significantly reduce the city’s reliance on B&B accommodation, which has been both costly for the council and unsuitable for families. Additionally, the redevelopment will provide sustainable, energy-efficient homes that incorporate improved heating systems, better insulation, and upgraded security features. The new housing will contribute to enhanced social stability, allowing families to establish a secure living environment and integrate more effectively into their communities.

Derby City Council has undertaken a significant initiative to purchase and remodel vacant student accommodation in the city with the objective of providing much needed affordable housing. The project is split into two phases with the first being the recommissioning of the property and the second being the conversion from x49 apartments to x95.

The project aims to reduce the use of unsuitable overnight accommodation such as Bed & Breakfast (B&Bs) by providing temporary accommodation which will provide the stepping stone into settled accommodation. This initiative is being funded through multiple sources, including the Local Authority Housing Fund (LAHF) and various council revenue streams. By remodelling existing buildings and bringing them back into use, the project not only addresses immediate housing needs but also generates long-term cost savings and social benefits for the community. The redevelopment is expected to be completed through a phased approach over three years, ensuring a smooth transition for residents and maximising the impact of the work.

Background to the project 

The need for affordable housing in Derby has become increasingly urgent due to rising homelessness rates and the growing demand for social housing. The limited availability of affordable rental properties has forced many families into temporary accommodations, which are often overcrowded and lacking essential facilities. In response, Derby City Council identified an opportunity to repurpose a vacant site consisting of 49 multi-room flats across 16 blocks, along with an adjacent property previously used for offices and communal space.

Key drivers for the project 

Several factors influenced the decision to pursue this redevelopment. The council sought to maximise the use of available assets, ensuring that existing buildings were repurposed rather than leaving them vacant or allowing them to be used for less beneficial purposes, such as short-term rentals. Additionally, the financial strain of placing families in B&Bs created an urgent need for a cost-effective, long-term solution. By acquiring and refurbishing this site, the council aims to provide sustainable housing while reducing operational expenses associated with overnight housing solutions.

Project setup and execution 

The project began with detailed negotiations to secure the purchase of the site, ensuring that the acquisition aligned with council priorities and financial feasibility. A comprehensive redevelopment plan was formulated, prioritising a phased approach to maximise efficiency and minimise disruptions. The council liaised with key stakeholders, including local councillors and planning authorities, to ensure regulatory compliance and community support and engaged with Derby Homes to undertake the initial works to recommission the property and then to undertake the subsequent main contract works.

Challenges faced and solutions implemented 

One of the primary challenges was securing adequate funding while balancing the financial implications of whether the property should be managed under the HRA or GF. The council addressed this by conducting thorough financial modelling and seeking legal guidance to determine the most viable approach. Another significant challenge was managing the construction process amid market volatility and potential cost inflation. To mitigate these risks, the council incorporated contingency funds and opted for a flexible procurement strategy, allowing Derby Homes to undertake competitive tendering and cost-effective sub-contractor selection.

The impact of this initiative extends beyond simply providing housing. By offering stable, high-quality homes, the project contributes to improved health and educational outcomes for families, particularly children who previously lived in overnight accommodations. Financially, the reduction in B&B usage translates to substantial cost savings for the council, allowing funds to be redirected to other essential services. Environmentally, the project’s focus on energy-efficient upgrades supports the council’s sustainability goals, reducing the overall carbon footprint of the housing stock.

Key takeaways and future considerations 

One of the most valuable lessons from this project is the importance of early planning and stakeholder engagement. By securing funding and regulatory approvals at the outset, the council was able to expedite the acquisition and redevelopment process. Additionally, the phased approach proved to be highly effective, allowing for immediate relief to families in need while ensuring long-term project sustainability.

Future plans and recommendations 

Moving forward, the council intends to explore additional development opportunities within the site to further expand affordable housing options. The success of this initiative has highlighted the potential for similar large-scale acquisitions, which could provide a more efficient alternative to purchasing individual properties. Strengthening partnerships with government funding bodies and leveraging financial incentives will also be a priority to sustain and expand affordable housing efforts in Derby.

Karen Brierley, Acting Head of Strategic Housing

[email protected]