Decision Maker: Cabinet
Decision status: Recommmend Forward to Council
Is Key decision?: Yes
Is subject to call in?: Yes
To consider the business case relating to a potential acquisition project to purchase 7 s106 units within the district.
1) To approve the business case and approve the acquisition of the seven identified properties, for the HRA.
2) To delegate to the Executive Director – Commercialisation (S151) to agree the contractual matters (including any terms and conditions which may represent a minor variation to the scheme approved in the business case) such as signing the contract/transfer document and other incidental actions that may be required and approving the associated due diligence and valuation required to purchase the properties.
RECOMMENDED TO COUNCIL:
3) To amend the Capital Programme to identify this project as an approved scheme in the 2020/21 Budget.
· A return on investment, and the generation of capital receipts from the sale of the initial tranche of shared ownership properties. As set out within the financial evaluation (Appendix A), there is a positive business case associated with the proposed investment.
· The delivery of 7 additional bungalows into the HRA. This includes homes to meet the needs of those who require low cost rented accommodation, and those who require support to access the ‘housing ladder’.
· Meeting housing need. The homes proposed will meet housing need in a location where there is evidence of a need for additional affordable homes.
· The replacement of homes sold through Right to Buy. On average, 23 Council homes have been purchased by tenants each year since 2017, by virtue of the Right To Buy. Since 1st April 2020, a further 11 properties have been sold to tenants. The delivery of new affordable homes can replace those homes lost each year, mitigating the impact of these losses on the HRA business plan.
· The new homes can be part-funded from the time limited RTB receipts.
Investing the RTB receipts on new rented housing ensures that the receipts do not have to be returned to Government. Additionally, the return to SHDC will increase as the direct capital invested decreases.
· Market confidence. The Council acting as a proactive purchaser of s106 properties, will provide confidence to local developers of the authority’s aspiration to facilitate sites to come forward and also of the demand for S.106 affordable homes.
Do Nothing - Under this option, the authority would not proceed to purchase the properties. As aconsequence, the expected benefits listed in Section 9 will not be realised. Officers wouldseek to identify alternative appropriate schemes for consideration by Cabinet and Council.
Reason Key: Incurring expenditure above £75,000 threshold in respect of revenue/£180,000 in respect of capital;
Wards Affected: Whaplode and Holbeach St Johns;
Conflict of Interest: None
Dispensation Granted: None
Report author: Katie Nicol
Publication date: 18/02/2021
Date of decision: 16/02/2021
Decided at meeting: 16/02/2021 - Cabinet
Effective from: 26/02/2021
Current call-in Count: 0