CARMARTHENSHIRE Council leaders have agreed to channel more than £1 million into a new company to build 500 houses across the county.

The funding comprises a sum of up to £100,000 to cover set-up costs for the council-owned Cartrefi Croeso Ltd, and a loan of up to £280,000 for 2018/19 operating costs.

A loan of up to £750,000 will fund detailed appraisals of eight sites earmarked for the houses and bungalows, plus the development of a procurement strategy and detailed design briefs, among other things.

The proposed houses would be sold or rented out and consist of a mix of one, two, three and four-bedroom properties including bungalows.

At least 74 of them would be classed as affordable. Six sites in council or joint ownership — Carmarthen West, Cross Hands, Burry Port, Llansteffan, Gwynfryn South and Nant y Dderwen — are being assessed for their viability.

Councillor David Jenkins, speaking at an executive board meeting, said the company would generate a surplus after three years.

Asked by Bynea councillor Deryk Cundy how elected members could examine the success of the company, Cllr Jenkins said: “There is a business plan in place that will be monitored as the business runs on.

“I have got no worries at all making sure that the council’s interests are properly maintained with the running of the contract.”

The council is the sole shareholder in Cartrefi Croeso, which will have five directors — two council officers, one councillor and two external appointees.

These directors are to be appointed by council chief executive Mark James after consultation with council leader Emlyn Dole.

An annual report is also to be provided for councillors to scrutinise, and any loan from the council will be repaid at a commercial rate of interest.

Cartrefi Croeso is expected to help deliver the council’s affordable housing commitment, provide apprenticeships, boost economic growth and deliver a return.

More loans would be needed to finance the construction of the houses and acquire any sites not owned by the council, although initially it is expected that Cartrefi Croeso would buy development land from the authority.

The executive board’s decision will now go to full council for approval.

A report setting out Cartrefi Croeso’s plans for 2018 to 2023 said house sales were far lower in Carmarthenshire than before the 2007/08 recession.

“The county has seen a reduction in the number of active construction firms involved in new house building,” it said.

“Some firms have ceased trading, whilst others have re-structured to concentrate on non-housing construction, or on repairs and maintenance. Larger national firms have retreated from the county.”

The report said it was not appropriate to publish expected prices of the houses at this stage.

It said a “realistic sales margin” was built in to the plans, although “the general assumption is that the company will generally operate on a reduced sales margin given its wider social responsibilities”.