Agenda item

(Director of Communities) To consider the attached report (CHB-004-2015/16).

(1)        That the Council Housebuilding Programme be accelerated further, and that the construction periods of Phases 3 onwards be brought forward to overlap, as set out in Appendix 1;

(2)        That the potential of not being able to spend all of the 1-4-1 receipts, despite overlapping construction phases be noted;

(3)        That, should it be identified that individual vacant market properties need to be purchased to avoid one-for-one capital receipts being passed to the Government:

(a)        The Director of Communities be authorised to source such properties for sale, make verbal offers to purchase and make recommendations to the Housing Portfolio Holder to agree their purchase; and

(b)        Approval be given to the Director of Communities to appoint, on appropriate terms, a suitable consultant / organisation to act on the Council’s behalf to negotiate the purchase of such properties - including to identify properties, assess their condition, undertake financial viability assessments, make recommendations and, if approved, make offers on behalf of the Director of Communities;

(4)        That, where the Council agrees to purchase affordable rented housing from developers, the Director of Communities be authorised to employ a suitable organisation as the Council’s Employers Agent to act on the Council’s behalf during the construction period or, alternatively, to employ a Clerk of Works (or similar) to undertake this role as appropriate; and

(5)        That, subject to the Housing Portfolio Holder being satisfied that it is the most cost-effective approach, the Council appoints a legal executive for 12 months renewable for a further 12 months as a cost of around £45,000 per annum.

Recommendations to the Cabinet:

(1)        That, subject to the costs being able to be met from the Council Housebuilding Capital Budget:

(a)        Should it be identified by the Director of Communities that there is a risk of one-for-one replacement capital receipts having to be passed to the Government, delegated authority be granted to the Housing Portfolio Holder to authorise the purchase of individual vacant properties for sale on the open market (either existing properties or new build);

(b)        Delegated authority be granted by the Cabinet Committee to authorise the Director of Communities to enter into Development Agreements with private developers, and agree terms for the purchase, for affordable rented housing required to be provided by developers in accordance with Section 106 Agreements, where an opportunity is presented that is considered suitable and appropriate; and

(c)        If outline planning application is granted for development on Council-owned land held by the General Fund at Pyrles Lane, Loughton and the Cabinet subsequently decides to sell the site on the open market, the sale be subject to a requirement that the required affordable housing element (expected to be between 40-50% of the total number of properties) be sold to the Council on practical completion, on agreed terms (to be set out in a separate Development Agreement) to be approved by the Cabinet when considering the sale of the site.

The Assistant Director (Housing Property & Development) presented a report to the Cabinet Committee on how the Housebuilding Programme could be accelerated. He advised that there were many risks outside of the Council’s control that could result in delays in house-building. Therefore, the report in the Agenda explored the options available to ensure that all 1-4-1 Receipts from Right to Buy sales are spent within the required 3 years of receipt and none are passed on to the Government, with interest. These options included purchasing street properties or land on the open market, purchasing affordable homes built on Section 106 sites and providing local authority grant(s) to one of the Council’s Preferred Housing Association Partners to fund affordable housing schemes in need of grant.

Decisions:

(1)        That the Council Housebuilding Programme be accelerated further, and that the construction periods of Phases 3 onwards be brought forward to overlap, as set out in Agenda Item 8, Appendix 1;

(2)        That the potential of not being able to spend all of the 1-4-1 receipts, despite overlapping construction phases be noted;

(3)        That, should it be identified that individual vacant market properties need to be purchased to avoid one-for-one capital receipts being passed to the Government:

(a)        The Director of Communities be authorised to source such properties for sale, make verbal offers to purchase and make recommendations to the Housing Portfolio Holder to agree their purchase; and

(b)        Approval be given to the Director of Communities to appoint, on appropriate terms, a suitable consultant / organisation to act on the Council’s behalf to negotiate the purchase of such properties - including to identify properties, assess their condition, undertake financial viability assessments, make recommendations and, if approved, make offers on behalf of the Director of Communities;

(4)        That, where the Council agrees to purchase affordable rented housing from developers, the Director of Communities be authorised to employ a suitable organisation as the Council’s Employers Agent to act on the Council’s behalf during the construction period or, alternatively, to employ a Clerk of Works (or similar) to undertake this role as appropriate; and

(5)        That, subject to the Housing Portfolio Holder being satisfied that it is the most cost-effective approach, the Council appoints a legal executive for 12 months renewable for a further 12 months as a cost of around £45,000 per annum.

Recommendations to the Cabinet:

(1)        That, subject to the costs being able to be met from the Council Housebuilding Capital Budget:

(a)        Should it be identified by the Director of Communities that there is a risk of one-for-one replacement capital receipts having to be passed to the Government, delegated authority be granted to the Housing Portfolio Holder to authorise the purchase of individual vacant properties for sale on the open market (either existing properties or new build);

(b)        Delegated authority be granted by the Cabinet Committee to authorise the Director of Communities to enter into Development Agreements with private developers, and agree terms for the purchase, for affordable rented housing required to be provided by developers in accordance with Section 106 Agreements, where an opportunity is presented that is considered suitable and appropriate; and

(c)        If outline planning application is granted for development on Council-owned land held by the General Fund at Pyrles Lane, Loughton and the Cabinet subsequently decides to sell the site on the open market, the sale be subject to a requirement that the required affordable housing element (expected to be between 40-50% of the total number of properties) be sold to the Council on practical completion, on agreed terms (to be set out in a separate Development Agreement) to be approved by the Cabinet when considering the sale of the site.

Reasons for Decision:

The Cabinet Committee have decided that all useable receipts (1-4-1) that are being accumulated from the sale of Council housing through the Right to Buy are to be reinvested back into building replacement Council housing at affordable rents. The Cabinet Committee have also considered a report on financing an accelerated House-building programme so as to ensure that all 1-4-1 Receipts from Right to Buy sales are spent within the required 3 years of receipt and none are passed on to the Government, with interest.

Other Options Considered and Rejected:

Not to accelerate or extend the Programme, or to accelerate it at a different rate or to extend it for a different period.