Agenda item

Report of the Assistant Director of Place (Economic Growth and Housing)

Further to Minute No. 11 of 26 May 2022, the Cabinet considered the report of the the Assistant Director of Place (Economic Growth and Housing) providing an update on the acquisition of properties at Buckley Hill Lane for use as Council Housing. The report sought approval to a revised proposal to acquire 18 homes (apartments) for social rent.

The following appendices were attached to the report:

·       Appendix 1 – Exempt Appendix Updated Business Case: Provision of Council Housing at Buckley Hill Lane, Netherton

·       Appendix 2 – Equality Impact Assessment: Provision of Council Housing

Decisions Made:

That

(1)      the updated Business Case for the acquisition of 18 homes for social rent from Sandway Homes at the Buckley Hill Lane development in Netherton be agreed;

(2)      the Council be recommended to approve and financially support the proposal as a capital scheme committing the use of Section 106 affordable housing receipts and Historic Right to Buy receipts to fund the purchase;

(3)      the Assistant Director of Place (Economic Growth and Housing) be authorised, in consultation with the Cabinet Member - Communities and Housing and the Cabinet Member - Regulatory Compliance and Corporate Services, to negotiate and agree the financial terms with Sandway Homes as identified within Appendix 1 of the report, and formally submit an offer to acquire the homes;

(4)      the Assistant Director of Place (Economic Growth and Housing) be authorised, in consultation with the Cabinet Member - Communities and Housing and the Cabinet Member - Regulatory Compliance and Corporate Resources, to enter into a contract with Homes England subject to the Council receiving a grant offer through the Affordable Homes Programme 2021-26;

(5)      the Assistant Director of Place (Economic Growth and Housing) be authorised to negotiate the contract terms and finalise all associated legal documentation for the purchase and acquisition;

(6)      the Council be recommended to approve a Supplementary Capital Estimate of £2,222,783 funded as fully detailed in the updated Business Case at Appendix 1 of the report through s106 affordable housing capital receipts, historic right to buy sharing agreement receipts and Homes England grant funding; and

(7)      the intention to seek Council approval for the net rental income from the scheme, including that received during the initial payback period, is reserved and reinvested into the Council Housing Programme, be noted.

Reasons for Decisions:

To progress with the delivery of council housing at Buckley Hill Lane through the acquisition of 18 apartments for social rent.

Alternative Options Considered and Rejected:

Option 1 – Do Nothing, choose not to provide council housing.

The Cabinet had already approved the acquisition of properties at Buckley Hill Lane for use as Council Housing in January 2021, and May 2022. However, the Council could choose not to provide council housing at Buckley Hill Lane. This could limit the opportunity to provide new social housing aimed to meet identified housing need in Netherton and did not align with the strategic case for Council housing delivery. Furthermore, this option would remove the complimentary offer of additional social housing provision thereby relying on housing associations to meet housing need.

Option 2 – Acquire 18 apartments for social rent without grant funding.

The Council could proceed with approval for the acquisition of homes at Buckley Hill Lane choosing not to apply to Homes England for grant funding through the Affordable Homes Programme (AHP) and instead fund solely from its own financial resources. This option was not recommended as the updated financial case presented at Appendix 1 of the report justified the need for grant funding to deliver social rent homes and funding was available through the AHP to deliver affordable housing in the way in which the Council proposed. Seeking to achieve grant funding would mean the Council’s capital resources were available to deliver future Council Housing Programme opportunities.

Option 3 – Acquire 9 apartments for social rent.

A further option would be not to acquire 18 apartments and instead acquire 9 apartments for social rent, as approved by the Cabinet in January 2021. Whilst this option would still deliver council housing in line with strategic priorities, market changes which affected Sandway Homes had seen a reduced demand for apartment sale properties and as such, the remaining 9 apartments could be sold to a housing association. The Council acquiring all 18 apartments offered benefits that it would be the sole provider of affordable housing on the site, especially with the apartment blocks being in close proximity to one another. Housing waiting list data from Property Pool Plus demonstrated strong need for smaller 1 and 2-bedroom properties.