Agenda item

Councillor Damian White, Cabinet member for Housing, introduced the report

Cabinet was reminded that the Council was currently identifying a medium term strategy for the delivery of over 1,000 new council properties to provide affordable housing for Havering residents.  At the same time, due to the new reinvigorated RTB (Right to Buy) process the Council was currently accruing significant RTB receipts which could, in part, be used to fund new build properties or the purchase of existing housing.   A significant issue with the receipts was that they had to be “used” within three years otherwise they had to be passed back to Government along with interest at 4% over the current base rate.  As part of the overall strategy for the delivery of new homes, the report outlined a proposed RTB Buy Back scheme, explained how the scheme would operate and be financed, and sought approval to proceed to implementation.

Members’ attention was drawn to the following points:

•           The Council would only be purchasing properties with vacant possession and priority was to be given to properties that were empty to reduce the possibility of delays.

•           Any sub-let properties being used for temporary accommodation of clients on the Housing Register would be excluded at this time.

•           In view of the lower value of property prices and the priority housing need requirements, the initial focus would be on the repurchase of two and three bedroom properties in the south of the Borough.

•           Any tenant who purchased a property under the RTB Scheme would have to repay a proportion of the discount they received if they sold that property within the first five years.

Reasons for the decision:

The scheme would have benefits for the Housing Revenue Account (HRA).  The additional stock would help to sustain the HRA rental income whilst providing additional units of accommodation to house those in need.  It would also allow the Council to apply some of the time-limited retained RTB receipts.

Other options considered:

The Council could choose not to operate a buyback scheme, however the Council would not then have this option available to increase the supply of affordable housing, or be able to apply some of the retained RTB receipts.  The operation of the policy would be kept under review, given the potential for changes in the operation of the RTB scheme, wider housing finance regime and the state of property market. 

The purchase decisions would be considered on a case-by-case basis with the benefit of full market knowledge from valuations, the impact on the HRA business plan and Medium Term Financial Strategy (MTFS).

Cabinet:

1.         Approved the implementation of the scheme as outlined in the report;

2.         Delegated to the Group Director, Children, Adults and Housing, authority to purchase properties, agree any necessary purchase prices and/or parameters and any other property transactions or decisions required to effectively implement the Scheme.