Council faces £174m interest bill on One Horton Heath scheme

Eastleigh Borough Council is forecast to pay £54.6 million in interest during the construction of its flagship One Horton Heath development, plus another £119.8 million over decades of owning and renting out the homes.

As of January 2026, total spending on the housing development had risen to £208.6 million.

The breakdown of figures was revealed in a Freedom of Information request submitted by the Local Democracy Reporting Service.

The council stressed that the 2,500-home scheme is expected to generate about £420 million in rent.

This will be enough to cover interest payments, pay back the loans, pay for upkeep and major repairs, and put money into reserves, said a council spokesperson.

But Paul Holmes, Conservative MP for Hamble Valley, said it is “irresponsible to assume that future income will automatically cover borrowing and interest costs”.

The local authority insisted that One Horton Heath is a long‑term investment that will pay for itself, with rent money over 50 years covering loan repayments and day‑to‑day costs.

The spokesperson added that the scheme should not be seen purely as a borrowing exercise, but as “a major public investment delivering much-needed affordable homes for local people, new roads, green spaces and community infrastructure.”

They argued that the council has fully considered the financial risks, and explained that if market conditions change, the council “still holds valuable homes and land as public assets.”

This is an important safeguard, the local authority said.

However, Mr Holmes said the interest costs alone “should raise serious concerns about the financial risks attached to this project”.

He called for greater scrutiny and a clear plan to manage the debt, adding: “The scale of debt associated with One Horton Heath and the long-term burden it could place on taxpayers is shocking and frankly unacceptable.

“These latest disclosures only strengthen the case that this level of borrowing is unsustainable.”

This comes after external auditors recently warned that the council has “significant weaknesses” in how it manages its money, against a backdrop of £585m of total debt.

Around £235m of that must be repaid or refinanced within a year, piling pressure on the Liberal Democrat‑run authority’s finances.

The auditors’ latest annual report for 2024/25 shows that around £90m of this short‑term borrowing comes from new government loans taken out to help fund One Horton Heath.

The combination of rising spending on the scheme, heavy short‑term borrowing, and a critical audit report has fuelled concerns that the council is taking on too much financial risk at once.

Mr Holmes said: “The Government must now urgently force Eastleigh Borough Council to take action before these liabilities become an even greater financial risk for residents who will ultimately have the bill laid at their door.”