The business plan for council-owned housing company Homes for Lambeth  was approved despite concerns from opposition councillors about housing market risks.

Green opposition leader, Cllr Jonathan Bartley, raised concerns around the risks around a £22.6m loan from the council outlined in the plan, and whether it could be repaid from the future sale of homes.

Speaking at a cabinet meeting, he said: “The cabinet is being asked now to approve a £22.6m loss underwritten by council effectively, but dealt with by future sale of private properties – which this business plan states are at serious risk.”

Cllr Bartley was also concerned about whether the £55m grant funding awarded to Lambeth to build affordable homes in 2017 could be effected since the Mayor of London proposed mandatory ballots for schemes where demolition is planned.

“The £55 million grant the council was awarded pre dated this so the council is not required to conduct ballots – but it’s still possible it might be that the requirement to ballot residents might be imposed retrospectively,” he said.

“I think we all know how residents on the estates would vote,” he added.

Conservative Cllr Tim Briggs was also concerned about the scrutiny of decisions to borrow money.

But a council officer said the plan was a “statement of intent”, with the council not under a commitment to lend the money.

She said financial decisions, including the decision to approve the loan, “will have all necessary financial and regulatory control within them to ensure decisions are robust and sound.”

But as a new company, Homes for Lambeth will have up-front costs, she said.

“There’s been recognition that in order to allow the company to move forward there will have to be some up-front borrowing and support for the project.”

She said the risks, which included rising construction costs, “are real.”

But an approval of the Homes for Lambeth business plan would not mean it can now progress on projects, she said.

“This plan of itself does not give all the authority for Homes for Lambeth to progress on all of its projects. We will be writing a commissioning paper that will set down exactly what we want to do,” she said.

Cabinet member for housing Cllr Paul Gadsby said the proposals “will enable us to build homes.”

“We have 29,000 people on the waiting list, 2200 in temporary accommodation – this is a problem across London and we as a borough are taking positive moves to try and address that.

“I am still yet to hear a coherent plan from the opposition.

Cabinet member for new homes, planning and investment, Cllr Matthew Bennett, said the plans were not about building homes for sale, but building for local people “in a way that is affordable to us.”

“This report sets out a strong commitment to building more social and affordable homes, which is why I was perplexed to hear so much focus on sale price risk,” he said.

“If you’ve got a masters degree in this we can sit down and talk about it but I suspect you don’t. I do, actually,” he added,

Council leader Cll Jack Hopkins said while there was “significant amount of risk, the risk of not doing it is greater.”

“It shows our commitment as an authority and administration to tackle housing crisis,” he said.

Homes for Lambeth has planning permission for estate regeneration at Knights Walk, South Lambeth and Westbury estates, with work expected to start this year.