Agenda item

To consider the attached report (CHB-007-2019/20).

That the contents of the Progress Report on the purchase of 18 street properties be noted and presented to the Cabinet in line with the Terms of Reference of the Council Housebuilding Cabinet Committee.

The Service Manager, Housing Management and Home Ownership presented a report the Cabinet Committee, she advised the report set out the progress that had been made in allocating the Council’s Right to Buy receipts in line with the report which was agreed by the Council Housebuilding Cabinet Committee in July 2015.

Offers had been made and accepted on 18 properties across the district. The total spend amounts to £6,374,329m which was made up of 30% Right to Buy receipts and the remaining funded from the capital house building programme. Furthermore, the Council’s Consultants have taken into account the construction methods, so as not to risk increased asset management challenges which was often the case with older properties such as pre-1945’s. The Council were working towards an exchange by the end of the financial year to meet Government requirements.

In July 2015, the Council House Building Cabinet Committee considered a report on accelerating the house building programme to ensure that all 1-4-1 Receipts from Right to Buy sales were spent within the required three years of receipt and none were passed on to the Government, with interest. One of the options agreed was to purchase street properties. The recommendations of the Cabinet Committee were later agreed by the Cabinet.

To assist the Council, Steven Tarry (Metaplan – CIHCM Development Director) was appointed by the Council. The instruction included sourcing street properties which were chain free and were not pre – 1945's (the construction method made them difficult to treat).

Overview of the properties

While the offers have been accepted, legal searches, property surveys and independent valuation surveys would need to be completed before exchange. Subject to a satisfactory outcome, it was recommended that the Council completed the purchase of the street properties, with a view to letting them at an affordable rent in line with the Rent Policy.

Councillor C Whitbread stated that although this was not the best way to spend the Right to Buy receipts, but at this time if the Council did not buy street properties they would have to pay the Government the receipts plus interest. He asked that in the future could officers not contact corporate companies that do part exchanges with a developer. The Service Manager advised that the plan going forward was never to be in this situation again.

Councillor A Lion asked how many empty properties there were in the district. The Service Manager stated that she did not know as this came under a different section.

Councillor C Whitbread asked when the Council sold a property did the Council have the first offer to buy back. The Service Manager advised that the Council did but this had not previously happened. Going forward she assured the Cabinet Committee that this would now happen.

Decision:

That the contents of the Progress Report on the purchase of 18 street properties be noted and presented to the Cabinet in line with the Terms of Reference of the Council Housebuilding Cabinet Committee.

Reasons for the Decision:

To give the Cabinet assurance that all of the Councils 1-4-1 Receipts from Right to Buy (RTB) sales were spent within the required three years of receipt, and none were passed on to the Government, with Interest. The Cabinet agreed on the recommendations of the Council Housebuilding Cabinet Committee to delegate the authority to the Service Director to source properties for sale on the open market, make verbal offers to purchase and make recommendations to the Housing Portfolio Holder to agree their purchase. 

Other Options Considered and Rejected:

Not to purchase these properties and pass on the Receipts to Government with interest. This would not be in the best interest of the Council given the local housing need. Also, the strain put on the Council’s Housing Revenue Account (HRA) due to the loss of stock under RTB would worsen.