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Insolvency experts reveal levels of debt at Cambridgeshire housing companies
Histon Road Developments LLP has ‘unsecured non-preferential claims’ of £1,121,363
Insolvency experts examining the affairs of two companies once run by property entrepreneur Simon Somerville-Large show the biggest creditor at £2.5m to be Houghton Homes of Cambridge. Last week CambsNews revealed that Laragh House Developments Ltd had entered into a voluntary creditors’ liquidation owing £2.309m, with shareholder Houghton Homes (Cambridge) Ltd owed £2.182m.
Matt Howard and Stuart Morton, both of Price Bailey LLP in Norwich, are joint insolvency practitioners, appointed to handle the liquidation.
They are also handling the winding up of a second associated company, Histon Road Developments LLP which built 27 homes – 10 of them affordable – on the site of the former Scotsdale laundry and nursery site, Histon Road, Arbury
Histon Road Developments LLP is shown in documents filed at Companies House as having total assets of £276,729 but with “unsecured non-preferential claims” of £1,121,363.
Of this Houghton Homes (Cambridge) Ltd is owed £490,415, intercompany creditors £581,723, banks and institutions £23,071 and trade and expense creditors £16,151, leaving an estimated deficiency of £844,634.
Mr Somerville-Large, the sole remaining director and founder, called a creditors meeting of both companies at the Anglia House, Central Avenue, St Andrews Business Park, Norwich, offices of Price Bailey on June 12.
Published preliminary accounts show Laragh House Developments Ltd has £63,326 available for creditors but debt of £2,311,408 which includes the £2.1m owed to Houghton Homes (Cambridge) Ltd and £50,000 owed to Histon Road Development LLP.
Painters and decorators, lawyers, British Gas and British Telecom, consultants, banks, accountants, and marketing companies are among the creditors.
Houghton Homes (Cambridge) Ltd is shown as a 50 per cent shareholder in Laragh House Developments Ltd, the remaining shares split between Mr Somerville-Large and his wife Fiona.
Four years ago, in July 2020, Houghton Homes revealed there had made a “significant investment” in Laragh Homes to drive forward expansion.
Houghton Homes founder, Andrew Houghton, became a director of Laragh House Developments Ltd although he resigned last year but retained his equity stake and shareholding.
At the time of his investment, he said: “I have been involved with Simon Somerville-Large and Laragh Homes as an investor on many projects, this new collaboration strengthens a trusted relationship that has been built up over the last 10 years.
“It is an excellent opportunity to become more involved with the company and develop the business further – we are all looking forward to taking Laragh onto its next successful stage of expansion.”
The Histon Road Development LLP was set up to build 27 homes at 295-301 Histon Road, Cambridge, 10 of them classified as affordable.
It secured an £8million loan from the Cambridgeshire and Peterborough Combined Authority to build them.
The loan was made by the Combined Authority under Mayor James Palmer’s affordable housing programme, which granted loans to development companies to support the building of additional affordable housing.
The programme allowed Mayor Palmer to authorise some of the £100m allocated to the Combined Authority for housing for “toolkit opportunities over and above just issuing traditional grant, such as a repayable loan agreement, as is being proposed”.
The loan to Histon Road Development Ltd was to acquire the land and develop the site after the company had said “that this will not happen due to constraints of a lack of funding from traditional High Street lenders and willing equity partners in the current economic climate”.
The Combined Authority board was told that “providing the loan will enable 10 affordable units to be delivered under the current S106 agreement, without which the scheme will not proceed in the foreseeable future”.
Although loan repayments were rescheduled, it was eventually paid in full but in the latter stage interest payments rose in line with the original agreement.
Matt Howard (left) head of insolvency and recovery at Price Bailey and (right) Stuart Morton, a Price Bailey partner and insolvency practitioner. Centre is Simon Somerville-Large, founder and sole director of Laragh House Developments Ltd.
Histon Road Development Ltd was required to meet the cost of the Combined Authority’s monitoring surveyor throughout the extended period.
Cambridge City Council acquired all 10 ‘affordable homes’ having taken on the additional 3 which were originally designated to form part of Mayor Palmer’s £100k homes initiative, which incoming Labour Mayor Dr Nik Johnson abandoned. Council tenants now occupy all 10.
Mr Houghton declined to speak to CambsNews, referring us to the joint insolvency practitioners who have not responded to requests for further information.
Other companies run by Mr Somerville-Large are not affected.
CambsNews has invited Mr Somerville-Large to respond.
