Agenda item

Housing and Community Services Portfolio Holder – to receive a report (C-041-2020-21) on the unallocated right to buy receipts, to be used to part fund a street purchase programme.

(1)  The Cabinet agreed a street purchase programme which would consist of up to 28 properties; and

(2)  Agreed to appoint Metaplan to undertake the purchases on behalf of the council.

The Housing and Community Services Portfolio Holder introduced the report on the purchase of street properties.

The report set out the details of the recommendation that the unallocated right to buy receipts were used to part fund a street purchase programme.  Whenever possible right to buy receipts (RTB) were used to fund the Council House Building programme.  If following this, there were unallocated receipts, there were several options which could be utilised.  A new policy on the utilisation of RTB receipts would first go to the Stronger Communities Select Committee and then be presented to Cabinet in the New Year.   One of the options for disposing of RTB receipts was to purchase street properties.  Although the return would not be as good as a sizeable new build scheme, when managed carefully and with the appropriate knowledge a street purchase scheme could add value to the HRA business plan.

Subject to some final budget adjustments, officers expect to be able to purchase up to 28 properties.  The total spend amounts to £10m.  It should be noted that this sat within the HRA.

The previous street property scheme provided a combined IRR return of 3.46%.

Councillor Philip just wanted to confirm that the gap from our RTB receipts and the cost of the buying of the properties would come from the HRA and not the general fund.

Councillor Bedford asked if we could take advantage of the reduced stamp duty if we progressed this at a faster rate to get it through the system. He was told that yes, they were looking to complete all purchases by the 31^st March, unless the government changed it. Councillor Bedford then asked how much it would save us. He was told that could be estimated and put in the minutes.

Councillor Chris Pond asked what parameters were used in buying these houses. Councillor H Whitbread said that there would be a mixture of properties in sizes, and houses and flats, depending on needs.

Councillor Wixley asked how the properties were to be selected and from what areas. He was told that they would be from across the district and would be a mixture of properties.

Decision:

(1)  The Cabinet agreed a street purchase programme which would consist of up to 28 properties; and

(2)  Agreed to appoint Metaplan to undertake the purchases on behalf of the Council.

Reasons for Proposed Decision:

There was a requirement that all the Councils 1-4-1 Receipts from Right to Buy (RTB) sales were spent within three years of receipt.  Any receipts which were not allocated were passed back to the Government, with interest.  The proposal to use the outstanding receipts would bring about much needed affordable housing and add value to the HRA business plan. 

Other Options for Action:

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.