A lettings agency set up by a council to buy properties on the open market and let them at open market rents has failed.

Reading’s Labour council blames “changes to local authority lending rules, the housing market, interest rates on borrowing, and other external factors have in recent years affected the viability of the company.”

Homes For Reading has written to its tenants – who pay rents in line with private norms – to offer personal help and support to find alternative accommodation when their tenancies end, which in some cases is in two years’ time.

The 101 homes purchased over eight years will be transferred, when each individual tenancy ends, to the council’s housing stock.

One tenant interviewed by the BBC says that since beginning their tenancy in 2018, they had paid the council £100,000 in rent.

And the council told the BBC that Homes for Reading, which was funded by loans taken out by the authority, was not able to pay them back “within a reasonable time”.

In a separate statement a council spokesperson says: “I am sorry for the disruption and inconvenience it may cause them. Officers from the council will be working actively with every one of our tenants between now and 2026 to help them find alternative suitable housing.

“We are committed to ensuring that they can all make the transition to other suitable homes with our support.

“Ultimately the difficult financial circumstances all councils now find themselves in mean we have a responsibility to look after our finances to support the provision of services that residents rely on. 

“We must prioritise the interests of all residents and communities we serve, who depend on the council remaining financially viable.”