Agenda item - Home Purchase Policy update

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Agenda item

Home Purchase Policy update

Report of the Executive Director for Neighbourhoods, Communities & Housing (copy attached).

 

Decision:

 

That the Housing & New Homes Committee:

 

(1)      Notes the outcomes of the Home Purchase Policy pilot to date.

 

(2)      Agrees the revised Home Purchase Policy attached at Appendix 2 which broadens the range of properties which the council can purchase beyond just those which were formerly owned by the council, with the following amendments

 

 

That all references to property being situated amongst existing Brighton & Hove City Council housing stock be amended to read ‘situated near by Brighton & Hove City Council stock.’ 

 

To amend the recommendations, as shown below in bold italics:     

 

          3 Criteria

 

3.1 The decision to purchase properties will be dependent on a business case on a property by property basis which would be determined by the following factors:

 

· The purchase price (up to £250,000) and availability of capital funds

 

· The viability of the purchase against rent levels as set out in the council’s rent policy.

 

· The cost of any refurbishment work required to bring the property up to the Brighton & Hove Standard (maximum of 10% of purchase price)

 

· Whether ongoing maintenance costs are considered to be excessive (or greater than average stock levels)

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· Whether a purchase of a property would free up land or enable access to a site suitable for development of affordable housing

 

· Savings to the council through reduced need for temporary accommodation or specialist accommodation

 

·The impact of a subsidy in addition to the rental income on the viability of the purchase (to a maximum of £10,000) The impact of net subsidy provided to the overall programme

 

          8 Other opportunities

 

8.1 Alongside the purchase of homes, other opportunities may become available to purchase properties or land for housing including securing affordable housing units as part of new housing developments in the city (S106 sites). The viability of each potential purchase would need to be completed taking account of:

 

· The purchase price and nature of the property/land

 

· The cost of any conversion and refurbishment work to bring it into use

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Grant funding opportunities to support delivery of new housing

 

· Planning considerations

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· The property/land is situated amongst existing Brighton & Hove City Council housing stock 8.2 The viability of each potential S106 site would need to be completed taking account of:

 

· The number of units and purchase price proposed

 

· Management viability e.g. would the units need to be in a separate block

 

· Financial viability of the property

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

·Timing of the purchase. An early discussion with developers would be essential, particularly if we propose to take forward affordable rented only units

 

· Planning considerations as we would only be seeking affordable rented properties at present

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

8.2 The viability of each potential S106 site would need to be completed taking account of:

 

· The number of units and purchase price proposed

 

· Management viability e.g. would the units need to be in a separate block

 

· Financial viability of the property

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

·Timing of the purchase. An early discussion with developers would be essential, particularly if we propose to take forward affordable rented only units

 

· Planning considerations as we would only be seeking affordable rented properties at present

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

(3)    For Committee to receive a report in a year’s time on the updated version of Appendix 1, with such a report to include estimates of the subsidy modelled for 27.5% living wage rents as well as an assessment of the estimated saving to the council as a whole, should the property assessed be let as temporary accommodation.

 

Minutes:

23.1   The Committee considered a report of the Executive Director, Neighbourhoods, Communities & Housing which sought to provide an update on the pilot to purchase properties that have previously been sold under the right to buy and that the council had first refusal to buy back. The report was presented by the Housing Strategy & Enabling Manager who outlined an amendment to the report. At the Estate Regeneration Member’s Board a correction was made to the criteria. The report stated that the properties (Section 106 sites) should be amongst Brighton & Hove City Council housing stock. It should read nearby Brighton & Hove City Council stock.

 

23.2   Councillor Gibson welcomed the report and the progress made and paid tribute to the Chair for wanting to see the Home Purchase Policy developed. Councillor Gibson welcomed the detail in appendix 1 and stated that he would like to see this updated in a year. He set out the following amendment:

  

“To amend the recommendations, as shown below in bold italics:

2.2
Agrees the revised Home Purchase Policy attached at Appendix 2 which broadens the range of properties which the council can purchase beyond just those which were formerly owned by the council, with the following amendments as shown below;

 

3 Criteria

 

3.1 The decision to purchase properties will be dependent on a business case on a property by property basis which would be determined by the following factors:

 

· The purchase price (up to £250,000) and availability of capital funds

 

· The viability of the purchase against rent levels as set out in the council’s rent policy.

 

· The cost of any refurbishment work required to bring the property up to the Brighton & Hove Standard (maximum of 10% of purchase price)

 

· Whether on going maintenance costs are considered to be excessive (or greater than average stock levels)

 

· The property is situated amongst, or near to, existing Brighton & Hove City Council housing stock

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· Whether a purchase of a property would free up land or enable access to a site suitable for development of affordable housing

 

· Savings to the council through reduced need for temporary accommodation or specialist accommodation

 

·The impact of a subsidy in addition to the rental income on the viability of the purchase (to a maximum of £10,000) The impact of net subsidy provided to the overall programme

 

8 Other opportunities

 

8.1 Alongside the purchase of homes, other opportunities may become available to purchase properties or land for housing including securing affordable housing units as part of new housing developments in the city (S106 sites). The viability of each potential purchase would need to be completed taking account of:

 

· The purchase price and nature of the property/land

 

· The cost of any conversion and refurbishment work to bring it into use

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Grant funding opportunities to support delivery of new housing

 

· Planning considerations

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· The property/land is situated amongst existing Brighton & Hove City Council housing stock 8.2 The viability of each potential S106 site would need to be completed taking account of:

 

· The number of units and purchase price proposed

 

· Management viability e.g. would the units need to be in a separate block

 

· Financial viability of the property

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Timing of the purchase. An early discussion with developers would be essential, particularly if we propose to take forward affordable rented only units

 

· Planning considerations as we would only be seeking affordable rented properties at present

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· The property/land is situated amongst existing Brighton & Hove City Council housing stock. The proximity of the property or land to existing Brighton and Hove Council housing stock;

 

 

8.2 The viability of each potential S106 site would need to be completed taking account of:

 

· The number of units and purchase price proposed

 

· Management viability e.g. would the units need to be in a separate block

 

· Financial viability of the property

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Timing of the purchase. An early discussion with developers would be essential, particularly if we propose to take forward affordable rented only units

 

· Planning considerations as we would only be seeking affordable rented properties at present

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· The property/land is situated amongst existing Brighton & Hove City Council housing stock. The proximity of the property or land to existing Brighton and Hove Council housing stock;

 

 

            and to add recommendation 2.3, to read as shown in bold italics:

2.3
For Committee to receive a report in a year’s time on the updated version of Appendix 1, with such a report to provide estimates of the subsidy modelled for 27.5% living wage rents as well as an assessment of the estimated saving to the council as a whole, should the property assessed be let as temporary accommodation.”

 

23.3   The amendment was seconded by Councillor Druitt.

 

23.4    Councillor Mears stated that she was not sure if the amendment was adding anything to an already very detailed policy and she and her group would support the recommendations in the report.  Members had already been told that a decision on every purchase would be made on a business case. 

 

23.5    Councillor Cattell remarked that many housing associations and registered providers were pulling back from their main purpose of providing affordable housing. The recommendation would give the council opportunities in the future. The council could step in when registered providers could not. 

 

23.6    Councillor Bell welcomed the report and stressed that the business case for each property would be submitted to Housing & New Homes Committee, Planning Committee and Policy, Resources & Growth Committee. This was an excellent start. The amendment was not needed.

 

23.7    Councillor Hill stated that the amendment did not make a difference to the policy but would enable the council to do more of what was already being done.

 

23.8    Councillor Moonan praised the policy. She stressed that should the amendments be agreed, officers would still be asked to look at purchases on a case by case basis. 

 

23.9    Councillor Druitt considered the report to be good and a very positive step forward. The Green Group amendments were simply minor adjustments to improve it. The concerns that had been raised were that the amendments might move away from a case by case basis to a more holistic policy basis. He assured members that was not the case. The amendments still made it clear that this was a case by case policy and each purchase would only be undertaken if there was a business case.

 

23.10  Councillor Druitt drew attention to the original recommendation “the cost of any refurbishment work required to bring the property up to the Brighton & Hove Standard (Maximum of 10% purchase price). He stressed that if the purchase price was 10.01% that property would be eliminated from the list.  Councillor Druitt referred to the recommendation “whether ongoing maintenance costs are considered to be excessive or greater than average stock levels.”  He asked what would happen if there were really good value ongoing maintenance costs but they happened to be 1% more than the average. Finally, he referred to the recommendation, “The impact of a subsidy in addition to the rental income on the viability of the purchase (to a maximum of £10,000).” He asked what would happen if this was £10,001? He considered that these were arbitrary numbers that were ruling out potentially good properties. The Green amendments took out arbitrary targets and looked at each property on a case by case basis. The amendments added a report on the whole scheme in a year’s time. Finally, Councillor Druitt asked whether each business case for each individual property would be reported to the committee.

 

          (Councillor Lewry arrived at the meeting at this point – 5.13pm).

 

23.11  In answer to questions the Housing Strategy & Enabling Manager confirmed that in relation to the right to buy back a property the Executive Director, Neighbourhoods, Communities and Housing had delegated authority up to £250,000 to purchase those properties. That was how the council had been operating under the pilot. In terms of the expansion of other opportunities and Section 106 sites; all of those would be subject to a business case and come back through the Committee.

 

23.12  Councillor Bell referred to Councillor Druitt’s comments. He had confidence that officers would still build a business case if a property was slightly over the percentage purchase price as stated in the report.

 

23.13  In answer to further queries the Housing Strategy & Enabling Manager clarified that individual properties that were purchased back, (where there was a right of first refusal), were purchased under delegated authority. The bigger sites such as the Section 106 sites would come back through committee.  The Executive Director further clarified that if the council had best opportunity, but one of the sections of the policy was not met such as the 10% or if it was £12,000 instead of £10,000, within the policy she did not have delegated powers to make an exception. However she did have the authority, after consultation with the Chair to bring any report to committee.  In addition, the Chief Executive and Leader of the Council in consultation with the Chair had urgency powers. 

 

23.14  Councillor Gibson stressed that a key point was that the second part of the amendment asked for a report back to Committee. The amendment was making the policy smoother and easier. The key factor was whether the business modelling stacked up and whether the programme required a subsidy.

 

23.15  At this point the Committee voted on the amendments outlined in paragraph 23.2 as amended. Before voting it was agreed to remove the Green amendment to the fifth bullet point of Section 3.1, the last bullet point of 8.1 and the last bullet point of 8.2 as these had already been amended by officers.  Amendment 2.3 was further amended to read “for committee to receive a report in a year’s time on the updated version of Appendix 1, with such report to include estimates of the subsidy modelled for 27.5% living wage rents as well as an assessment of the estimated saving to the council as a whole, should the property assessed be let as temporary accommodation.”   

 

23.16  Members voted for the amendments as follows. 2.2 (3 Criteria) third bullet point (agreed by 6 votes in favour with 4 abstentions.   2.2  (3 Criteria) - fourth bullet point (agreed by 6 votes in favour with 4 abstentions). 2.2 (3 Criteria) Last bullet point (agreed by 6 votes in favour with 4 abstentions).

 

23.17  Members voted on the officer’s amendment.  The report stated that the properties (Section 106 sites) should be amongst Brighton & Hove City Council housing stock. It should now read nearby Brighton & Hove City Council stock.  This change was unanimously agreed.

23.18  Members voted on amendment 2.3 as further amended (see paragraph 23.16 above). This was agreed unanimously.

 

23.19  Members voted on the substantive recommendations as amended which were agreed unanimously.

 

23.20  RESOLVED:-

 

 

That the Housing & New Homes Committee:

 

(1)      Notes the outcomes of the Home Purchase Policy pilot to date.

 

(2)      Agrees the revised Home Purchase Policy attached at Appendix 2 which broadens the range of properties which the council can purchase beyond just those which were formerly owned by the council, with the following amendments

 

 

(All references to property being situated amongst existing Brighton & Hove City Council housing stock be amended to read ‘situated near by Brighton & Hove City Council stock.’ as amended by officers. 

 

To amend the recommendations, as shown below in bold italics:   

 

          3 Criteria

 

3.1 The decision to purchase properties will be dependent on a business case on a property by property basis which would be determined by the following factors:

 

· The purchase price (up to £250,000) and availability of capital funds

 

· The viability of the purchase against rent levels as set out in the council’s rent policy.

 

· The cost of any refurbishment work required to bring the property up to the Brighton & Hove Standard (maximum of 10% of purchase price)

 

· Whether ongoing maintenance costs are considered to be excessive (or greater than average stock levels)

 

·     The property is situated nearby existing Brighton & Hove City Council housing stock

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· Whether a purchase of a property would free up land or enable access to a site suitable for development of affordable housing

 

· Savings to the council through reduced need for temporary accommodation or specialist accommodation

·The impact of a subsidy in addition to the rental income on the viability of the purchase (to a maximum of £10,000) The impact of net subsidy provided to the overall programme

 

          8 Other opportunities

 

8.1 Alongside the purchase of homes, other opportunities may become available to purchase properties or land for housing including securing affordable housing units as part of new housing developments in the city (S106 sites). The viability of each potential purchase would need to be completed taking account of:

 

· The purchase price and nature of the property/land

 

· The cost of any conversion and refurbishment work to bring it into use

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Grant funding opportunities to support delivery of new housing

 

· Planning considerations

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

· The property/land is situated nearby existing Brighton & Hove City Council housing stock

 

8.2

The viability of each potential S106 site would need to be completed taking account of:

 

· The number of units and purchase price proposed

 

· Management viability e.g. would the units need to be in a separate block

 

· Financial viability of the property

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Timing of the purchase. An early discussion with developers would be essential, particularly if we propose to take forward affordable rented only units

 

· Planning considerations as we would only be seeking affordable rented properties at present

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

·     The property/land is situated nearby existing Brighton & Hove City Council housing stock.

 

8.2 The viability of each potential S106 site would need to be completed taking account of:

 

· The number of units and purchase price proposed

 

· Management viability e.g. would the units need to be in a separate block

 

· Financial viability of the property

 

· The viability of the purchase against rent levels as set out in the council’s rent policy

 

· Timing of the purchase. An early discussion with developers would be essential, particularly if we propose to take forward affordable rented only units

 

· Planning considerations as we would only be seeking affordable rented properties at present

 

· There is a specific housing need for the type of property that is being offered, as established by the Housing Register

 

·     The property/land is situated nearby existing Brighton & Hove City Council housing stock.

 

(3)    For Committee to receive a report in a year’s time on the updated version of Appendix 1, with such a report to include estimates of the subsidy modelled for 27.5% living wage rents as well as an assessment of the estimated saving to the council as a whole, should the property assessed be let as temporary accommodation.

 

Supporting documents:

 


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