Agenda item

RESOLVED:

That the Cabinet:

  I.  Authorised budget provision and spend of up to £4.25m from for the purchase of former Right-to-Buy properties in the market to support the increased supply of temporary accommodation available to the borough.

  II.  Allocated the properties purchased for one time only nomination by Local Space as part of the agreed decant programme

  III.  Gave delegated authority to the Director of Strategic Property Services, in consultation with the Group Director of Neighbourhoods and Housing and the Group Director of Finance and Corporate Resources, to negotiate final terms, conditions on the above purchases, including price and purchase of the property. 

  IV.  Authorised the Director of Legal and Governance Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report and to enter into any other ancillary legal documentation as required. 

Reasons for decision

As outlined within the report, there is a significant need to expand the stock of social housing in Hackney.

As set out within Part 7 of the Housing Act 1996, the Council has a statutory duty to provide interim temporary accommodation to homeless households to whom it has a duty to provide permanent housing. 

By agreeing to purchase the 10 properties, we will not only immediately increase the number of affordable units in response to the increasing demand, but will potentially have access to more units of affordable settled accommodation for those currently within our temporary provision, freeing up this stock for a speeded up programme of Local Space  reprovision properties.

Deputy Mayor Bramble invited Councillor Etti to introduce the report. Councillor Etti outlined the report to the Cabinet.

Deputy Mayor Bramble invited Councillor Garbett to speak on the item, the following questions were raised:

1.  Will Local Space be buying more homes *in the borough* with their proceeds from selling the 34 homes in phase 2 or elsewhere (as I know that their portfolio is across London)?

2.  Why are the council purchases only restricted to homes on council estates (this is what I've understood ‘owning the freehold’ to mean) and would the same VfM restriction apply to long leasehold street properties not just flats?

3.  Re costs, what is the distribution of sizes/bedrooms in these homes? As I know from the Dalston plan we need 3 / 4 beds (assume it's the same across the borough)

4.  I also wanted to check why there is a the focus on former RTB where the council would own the freehold - you are probably aware but thought I'd check that the scope of the Right to Buy-Back fund covers more than just RTB and is more flexible and anything can be purchased perhaps this is being considered for a further phase?

5.  Related to the above, are their plans for further phases?

6.  The cover sheet states "Sustainability and climate change 6.9. None of the recommendations in this report would have a direct impact on the physical or social environment." - purchasing existing homes, rather than building is positive in terms of sustainability as will reduce embodied carbon from construction of new homes etc. Something the council should promote

Councillor Etti responded to each question, as set out below:

1.  As set out in section 6 of the paper Local Space will be purchasing units out of borough with the proceeds of selling the phase 2 units.

2.  The Paper does not itself propose a policy on the types of property that the Council should purchase. It does in Section 6.7 advise that the purchase of ex right to buy properties is an existing approved policy that this recommendation fits into.  The general principle of acquisition is for estate based properties as there is minimal additional management and maintenance costs associated with the properties. As the properties recommended for purchase are in existing housing blocks, there is minimal additional management and (block) maintenance costs. There would be internal maintenance responsibility of these properties which can be funded through the rental income stream. If any freehold/street properties are purchased they are likely to have a much higher cost, reducing the number of homes that can be made available, and may well require additional management costs and borrowing costs. Any street properties would also require a full structural and condition survey and may incur further additional maintenance cost, as it will be a new property structure to maintain. Also the rent for houses are not significantly different to flats, therefore freehold/street properties would not be as cost effective to purchase and potentially would be a drain on the HRA business plan financial model which ultimately would reduce the resource available for investment in our housing stock.

3.  The Nominations agreement sets out a service requirement for 2 and 3 bed properties. This is based on the sizes of property needed to re-house the existing residents.

4.  The purchase of these properties is in line with approved policy. As set out in the “Acquisition of properties to support the delivery of affordable housing” policy approved by Cabinet in March 2020. The recommendation of the policy was to purchase ex RTB properties, including those owned by Housing Associations.  The reason for the focus on ex RtB is as set out above - it represents a more cost effective acquisition for the HRA than non estate based properties. Any further flexibilities to the acquisitions policy would require separate Cabinet approval.

5.  This second phase is currently expected to be the final phase of this work with Local Space.

6.  The recommendation in this report for buy back of former Right To Buy properties is made in the context of the acquisitions policy referenced above and is primarily based on the financial considerations and maximising the homes that can be made available through the proposed scheme. The points raised about sustainability and embedded carbon is noted and will be shared with the Regeneration service for consideration. It is noted, however, that Hackney has a severe and increasingly acute shortage of all types of housing, including social housing, so new build development is still likely to be required to tackle the housing crisis.

RESOLVED:

That the Cabinet:

  I.  Authorised budget provision and spend of up to £4.25m from for the purchase of former Right-to-Buy properties in the market to support the increased supply of temporary accommodation available to the borough.

  II.  Allocated the properties purchased for one time only nomination by Local Space as part of the agreed decant programme

  III.  Gave delegated authority to the Director of Strategic Property Services, in consultation with the Group Director of Neighbourhoods and Housing and the Group Director of Finance and Corporate Resources, to negotiate final terms, conditions on the above purchases, including price and purchase of the property. 

  IV.  Authorised the Director of Legal and Governance Services to prepare, agree, settle and sign the necessary legal documentation to effect the proposals contained in this report and to enter into any other ancillary legal documentation as required. 

Reasons for decision

As outlined within the report, there is a significant need to expand the stock of social housing in Hackney.

As set out within Part 7 of the Housing Act 1996, the Council has a statutory duty to provide interim temporary accommodation to homeless households to whom it has a duty to provide permanent housing. 

By agreeing to purchase the 10 properties, we will not only immediately increase the number of affordable units in response to the increasing demand, but will potentially have access to more units of affordable settled accommodation for those currently within our temporary provision, freeing up this stock for a speeded up programme of Local Space  reprovision properties.