North Yorkshire Council owned house builder Brierley Homes set to register losses of £3 million

Defects and design issues with new housing have led to delays to Brierley Homes receiving income from sales, a report for councillors has revealed.

The company, which is run as part of the council’s Brierley Group commercial arm, was forecast to see losses of £2.1m for the year at the end of the third quarter, taking into account £2.3m of financing costs and £0.9m in overheads.

But council officers say the losses are now expected to have risen by a further £1m by the end of the financial year.

Kerry Metcalfe, the council’s assistant director for commercial, property and procurement, said in a report to members: “The updated draft outturn position for the company is still being worked through however current projections anticipate that a further loss in the region of £1m will accrue in the final quarter of the year due to further delays in sales income and associated financing costs – taking the total in-year projected loss for the company to in the region of £3m.

“The delayed sales are in part due to extended defect works on three plots at the Marton-cum-Grafton development and extended design issues at The Paddocks, Great Ouseburn site.”

Last year, the house builder announced it was moving away from using main contractors to working with in-house teams to address quality issues.

But the report for councillors said it was still facing challenges with managing subcontractors on five active sites, with a further eight in the pipeline.

The company recently won an International Property Award for its development at Yew Tree Farm in Marton-cum-Grafton.

It is currently working with the council to deliver affordable homes and develop sites where financial viability is difficult.

The report will be presented to the council’s shareholder committee on Tuesday next week.

Chair of the committee and council leader, Councillor Car Les, admitted to the Local Democracy Reporting Service that the results for Brierley Homes were “disappointing”.

But he added: “It is disappointing when you look at the figures on a piece of paper, but you have to see it in context.

“It’s a housebuilder, it buys land, it gets planning consent, it starts to build and develop that land, and then it sells the houses.

“There’s always going to be a timing issue and it’s a timing issue in this case.”

Councillor Les said other companies within the Brierly Group had recorded better results.

“There’s some very good results in there, particularly Yorwaste and Align Property Partners,” he added.

Yorwaste is forecast to make a profit of £1.28m for the year, while Align’s surplus is predicted to exceed £1.5m.

In total, the group is forecast to make a profit of around £2.7m in 2024/25, with councillors set to authorise a dividend payment of £1m to be paid to the authority.