Issue - meetings

Portfolio Holder – Councillor Alasdair Ross

This report provides Executive with an update on each of the housing developmentschemes beingdelivered onits behalfby Handford Homes.

71.1.     Councillor Ross introduced the report which was the latest update on the progress made by the Council and its housing delivery partner, Handford Homes, on council housing developments. Councillor Ross highlighted that the demand for social housing was the highest it had ever been, and the Council was keen to deliver more social housing. The Government’s review of the Right to Buy scheme should help to return more money back to the Council from the sale of its council housing.

71.2.     In accordance with Part 4, Section 4, Paragraph 3.9 of the Constitution, the following questions were asked:

Question 1 – Councillor Holmes
In light of the assurances given to local residents in Ravenswood of the mix of housing to be provided in this scheme, which included these 10 discount market sale homes for first-time buyers, should an apology be given to residents for the proposed change to market rent?

71.3.     Councillor Ross commented that the Council was reluctantly proposing this change due to rising house building costs, which had meant that discounted market sale was no longer financially viable for these units. The next most accessible tenure of private market rental was being proposed. The scheme would still deliver the same number of mixed housing units and the 10 homes affected by the change were a small proportion of the total of 96 homes that were being provided. The recommendation was a pragmatic response to market conditions and Councillor Ross did not agree that an apology was required. This situation had not happened today; Officers had been monitoring the situation for 2-3 years and had tried to estimate how the market might change, but to wait any longer would push the costs even higher.  

Question 2 – Councillor Holmes

Will there be any practical difference between the homes let on affordable rents and those let at market rents?

71.4.     Councillor Ross commented that the homes were built to an excellent quality and were much better than those provided by other developers. The only difference was that the market rented units would include some white goods, e.g. fridge freezer and washing machine.

Question 3 – Councillor Holmes

Will the private letting scheme for the 10 homes through General Fund capital loans, including the finance required to meet minimum revenue provisions, mean the value to the Council of this investment is questionable?

71.5.     Councillor Ross commented that given that market sale tenure was not viable, the private rent tenure represented the best financial option. On the basis that this would be a lease, the payments received should cover the revenue cost of the associated fixed loan within the 40-year breakeven period that the Council used as the benchmark for domestic property investments. Councillor Ross added that he hoped that there would be changes from the new Government as the current payback system made it very difficult for Councils to build council homes on a short timeframe given how long it took to pay back.

Question 4 – Councillor Holmes

Will  ...  view the full minutes text for item 71