A plan to improve the condition of council homes is “on track”.

Brighton and Hove City Council is planning to transfer 499 of its homes to an “arms length” company, known as a local delivery vehicle (LDV).

The local authority will then use these homes as assets to raise about £30 million – £15 million less than was originally suggested – to carry out work to the city’s housing stock.

Council leader Mary Mears set a deadline last year for the body to be set up by the end of March.

Housing cabinet member Maria Caulfield has confirmed she expects the agreement to be signed shortly admitting the plans are “well on track”.

The delay is due to an agreement being signed with the bank, which The Argus understands is Spanish giants Santander.

The LDV body, which is made up of independent members, councillors and tenant representatives, was agreed in September 2008.

The council will lease the properties on 125-year terms to the company, which is called Brighton and Hove Seaside Community Homes.

It will then borrow money from a commercial bank with the rental income from the properties serving as collateral for the loan.

About £18 million will be used to bring the council’s housing stock – a third of which are still classed “below minimal quality” – up to the government’s Decent Homes Standard by the deadline of 2013.

A further £12.1 million will refurbish properties which the local authority leases.