Westminster Builds, the housing investment arm of Westminster City Council, has reported a lower-than-expected operating profit due to higher service charges, according to a recent Shareholder Committee meeting. The draft final position for the year ending March 2025 shows an operating profit of £0.531m, against a business plan assumption of £0.600m.
The key variance is mainly attributed to higher-than-expected service charges. Despite this, income from investments reached £2.418m, representing the in-year cash profit from the Luton Street sales.
Westminster Builds manages 101 intermediate rent homes purchased from council developments. The company plans to acquire seven homes at Luxborough in Q1 2025/26 and 31 homes at Westmead in Q4, bringing the total number of properties owned and managed to 139. The Westminster Builds Business Plan and the Council's capital strategy give flexibility for the company to retain profit to help fund future developments and acquisitions, which will lead to improved performance and increased profit, and consequently, less reliance on Council borrowing.
The company has worked closely with Westminster City Council Housing, which lets and manages the homes. Since letting commenced in December 2021, all 101 properties have been occupied by the same residents. The rental levels, location and high specification of build make the properties very popular within the community. The first round of two-year renewals were recently processed, and all eligible tenants renewed.
The business plan assumes the delivery of Ebury Phase 2 through Westminster Builds. An Outline Business Case was approved by Capital Review Group in April 2025, endorsing Westminster Builds as the preferred delivery route. Future governance around drawdown of development loans will be presented to the Shareholder Committee towards the end of 2025 when the main construction contract is signed and delivery transferred to Westminster Builds.
As of 31 March 2025, Westminster Housing Investments Limited (WHIL) had total interest-bearing debt of £12.260m, of which £11.047m were acquisition loans owed to Westminster City Council. Currently, WHIL is only making interest payments on all acquisition loans. From financial year 2026/27, principal loan repayment will be due on the first site acquired by WHIL. Total assets at the same date were £34.538m. The company is also due a final tranche of profit from the LLP for the sale of homes at the Luton Street development, forecasting £0.912m of 25/26 WHIL profit (60% of total profit as per LLP agreement). During 23/24 and 24/25 a total £10.068m has been received by WB.
The Shareholder Committee reviewed the performance of Westminster Builds for the year 2024/25 and considered key activities for 2025/26, noting the report. In the minutes of the Shareholder Committee meeting held on March 24th, 2025, Cllr Boothroyd asked about the impact on the financial plan if Ebury Phases 2 and 3 do not go through Westminster Builds. It was agreed that this would have an impact. The Public Reports Pack contains more details.
