Agenda item

Report BMH 108  Housing Scheme for Buying back Ex Council properties.

(Enclosure)

The Business Manager, Housing, presented report number BMH 108 on the development of a Housing Scheme for buying back ex-council properties.  The aim of the proposed scheme was to contribute to the Council’s housing priority which had been developed from the current HRA Business Plan, Housing Strategy and the Housing Asset Management Strategy.

The Right to Buy Scheme had been introduced in 1980 and was an opportunity for qualifying social tenants to buy their homes at a discount. It was reported that the discount gap for outside London had been increased to £75,000 by the Government in 2013 which in turn had accelerated sales. In South Kesteven, the maximum discount currently stood at £77,900 which was increased on the 1^st April each year by the consumer price index. 

Members were informed that the Council had sold 37 properties, during 2014/15 and 41 properties up to the end of March 2016.  A number of enquiries from residents who wanted to sell their former owned council properties back to the Council had also been received. 

The Business Manager, Housing noted that the proposed scheme would not only complement other council housing initiatives but would help bring into line the management of council owned properties, such as council owned blocks of flats, but could also mitigate the pressures on accommodation and homelessness.  Implementation of this scheme would support the sustainability of the HRA by replenishing housing stock together with rental income lost by Right To Buys as well as ease pressures on areas designated for future regeneration.  It was anticipated that the scheme would also mitigate pressures on the General Fund for temporary housing by increasing the supply of affordable housing.  She noted that although the Council had bought back a couple of properties, the potential to repurchase properties had not actively been advertised. It was proposed that acquisitions would only be undertaken using specific criteria and could be facilitated through the implementation of a buy-back scheme funded through the HRA.

Members were informed that the current HRA Capital Programme for 2016/17 to 2018/19 included a budget of £8.1m for stock growth.  After acquisitions had been made for new house building schemes, there was a residual balance of £5m available which could potentially be used for funding the proposed buy-back scheme.

The scheme would prioritise properties based on valuation, size, condition and location.  They would also be subject to a viability check which would include consideration of the rental return against the cost of purchase and repairs.  In addition personal circumstances especially around potential severe hardship would also be taken into consideration.

In order to expedite potential acquisitions, especially where there could be severe hardship, affordability issues or personal tragedy, it was proposed that the Strategic Director – Environment and Property, in consultation with the Section 151 Officer be given delegated authority to authorise these acquisitions. A full valuation report for each property would be undertaken by the District Valuer and if considered appropriate and feasible the property to be re-purchased would be submitted for approval.

Discussion took place on the criteria for proposed acquisitions, whether consideration might be given to an “equity” release scheme providing it did not place people in a position where they would not be eligible for social housing; whether there would be losses due to variances in valuations since the original purchase; whether larger properties could be converted into smaller units; whether the tenancy arrangements would remain the same and if there would be potential to purchase empty non council properties for council stock. 

Discussion also took place around members visiting council properties to ascertain the quality of the housing currently supplied.

The Strategic Director explained that the issues discussed would be considered under different strategies but this particular scheme was solely meant for the re-purchase of ex council properties.  She also noted the implications arising from Central Government putting a levy on an assumed level of sale.

Discussion also took place on how the proposed scheme would be monitored by Members and whether delegated powers to the Strategic Director would be sufficient or whether the Executive Member, Housing should be consulted or informed.

The Communities PDG recommends to the Executive:

a)    That the scheme is implemented as outlined in Appendix 1 of the report number BMH108;

b)    That the Strategic Director – Environment and Property, in consultation with the Section 151 Officer or deputy be given delegated authority to authorise the purchase of these properties, agree any necessary purchase prices and/or parameters and any other property transactions or decisions required to effectively implement the scheme; and

c)     That the Strategic Director – Environment and Property, informs the Executive Member,  Housing of purchases/acquisitions;