COUNCIL 17 NOVEMBER 2015 – FOR INFORMATION
Poole Housing Partnership
Acquisitions & Disposals Policy
Introduction
The Housing Strategy include plans to invest in the provision of affordable housing.
Currently this is achieved through new build. It is also possible under the provisions of the
Right Of First Refusal legislation to achieve this through buy-back opportunities.
Since the introduction of the HRA Self Financing Model in April 2012 a proportion of Right
To Buy sales income can be retained for use in acquiring properties to replace dwellings
lost through the Right To Buy process. It is now prudent to implement an Acquisitions &
Disposals Policy to enable opportunities to be taken advantage of in a timely manner as
these opportunities arise.
The potential for strategic disposal of HRA Assets should also be considered where it can
assist in the viable delivery and sustainability of the plan.
Background
Under the retention agreement introduced as part of the Right To Buy legislation from April
2012, the authority has opted to retain a proportion of Right To Buy sales receipts to
replace the dwellings lost through this process. Receipts from the first 5 sales in a financial
year are shared between the authority and central government. For additional sales, a
proportion is retained by the authority to set aside in relation to the debt attributable to the
sale. The balance is then available to be used in line with the current pooling
arrangements and retention agreement.
Under the retention agreement, the authority is required to re-invest the retained receipt
within a 3 year time frame, using it to fund a maximum of 30% of either a new build
affordable dwelling or the purchase of an existing dwelling. The preference will be to invest
in new build dwellings where possible to increase the overall supply of affordable housing
in Poole. However, shortage in available land and the tight development timeframe mean
that the ability to purchase existing dwellings could be actively considered to increase the
supply of affordable housing within the constraints that exist.
The Housing Capital Programme does not currently incorporate additional sales receipts
as a form of funding until the receipt is realised. It will be necessary going forward to
include an estimated level of funding and an associated assumption of expenditure in
relation to stock growth, to ensure that we can meet obligations under the retention
agreement.
Retained Right To Buy funding will need to be allocated to either new build schemes or
strategic acquisitions, with the mix of housing provided by the HRA reflecting the identified
need for housing in Poole.
This Policy sets out the criteria under which potential acquisitions and disposals should be
assessed to enable decisions to be made quickly and within appropriate timeframes.
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COUNCIL 17 NOVEMBER 2015 – FOR INFORMATION
Financial Background
Funding to support acquisitions will be made available from the Housing Revenue Account
capital programme. This identifies £0.5m per annum for the next 10 years to support a
small sites programme and individual developments with the flexibility to respond to
emerging opportunities. This policy will allow an additional tool to be used to support the
delivery of this work while not committing this level of spend if priorities show that the
funding would be better used elsewhere.
Policy Objectives
The objectives of this Policy are:

To increase the supply of additional affordable housing owned by the Housing
Revenue Account, recognising the increased demand on the housing register whilst
providing opportunity to re-balance the mix of housing owned by BOP.

To facilitate the acquisition of property / assets that will assist in the delivery of
affordable homes and potential new build opportunities.

To facilitate the disposal of property / assets that are no longer meeting the service of
business need and where the sale receipt could be better utilised elsewhere.

To provide a framework to assess the viability and value for money of acquiring or
disposing off a specific property asset, delivering the flexibility to be able to act within
limited timescales, as opportunities arise.
Acquisition Criteria
Each potential acquisition will be assessed on an individual basis. A proposed acquisition
will only be progressed if the criteria are met and value for money can be demonstrated.
The criteria is as follows:
1. A property which has had, or is particularly suitable for, significant disabled
adaptations
Consideration will be given to the purchase of a property which is suitable for
conversion or extension to create ground floor bathing facilities, level access
showers, etc or which lends itself to the installation of a through floor lift to allow
disabled access to the first floor of the property.
2. Empty property or a property in disrepair which is causing concerns in the
locality
Privately owned dwellings sometimes fall into disrepair for various reasons and
cause concerns in the locality. In these instances it may be viable to make an offer
to purchase the property and undertake the necessary works to improve not only
the dwelling but also the surrounding area.
3. A property in specific high demand at any time
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For example, larger properties suitable for larger households or one bedroom
properties suitable for downsizing or properties in a geographical area of high
demand. This criterion would enable the purchase of suitable dwellings on the open
market in areas of high demand and to meet an identified housing need.
4. An existing unit on a new build site where this could increase the balance of
affordable housing
Working with developer partners and other registered providers in delivering
housing on both our own development sites and the strategic growth sites, there
may be an option to acquire new build dwellings direct from the developer.
Purchasing some of the dwellings initially identified as market housing could
increase the supply of affordable housing in Poole. We would be more likely to
purchase houses than flats in this manner, as there could be significant service
charges attached to the purchase of any flat on the open market or direct from a
developer.
5. Leasehold flats where BOP is the freeholder
There are currently 562 leasehold flats which have been purchased under the Right
To Buy Scheme over the past 30 years. Under the terms of the lease, leaseholders
are required to pay service charges for services and facilities that the flat benefits
from. They are also required to contribute towards the costs of major works and
improvements to their block. The contribution towards major works and
improvements can be significant and the collection of the money can then prove
difficult and costly. Any offer to spread or defer payments has a negative impact on
the HRA cashflow.
Buying back the leasehold flats would increase the supply of affordable housing and
mitigate the impact of non recovery of major works charges. This could also result
in ownership of the entire block allowing works to commence without the need for
lengthy Section 20 consultations to be carried out.
6. The purchase of land or property that would aid a new build development
Where the opportunity arises, consideration could be given to the acquisition of
land, garages or existing dwellings, where ownership of the asset would aid the
design or a potential new build site. This would allow maximisation of development
opportunities to deliver the greatest number of additional dwellings.
7. A property where the location lends itself to ease of housing management
and maintenance
Property in or around existing housing estates may prove efficient to manage and
maintain, particularly due to their locality, giving rise to consideration for purchase.
8. Any other property which it may be in the Council’s interest to repurchase
and where value for money can be clearly demonstrated
From time to time there may be other opportunities to acquire an existing dwelling.
In these circumstances a business case will be prepared to demonstrate the
financial viability of any proposed acquisition.
Disposal Criteria
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Each potential disposal will be assessed on an individual basis. A proposed disposal will
only be progressed if the criteria are met and value for money can be demonstrated. The
criteria is as follows:
1. Property where the business case indicates a negative financial contribution
Some blocks of flats are completely leasehold occupied. Due to anomalies in old
leases, the proportion paid by each leaseholder in service charges and major works
charges does not always equal 100% of the costs incurred. Managing and
maintaining the blocks can be difficult and time consuming and due to the lease
proportions, costs can not be fully recovered. These blocks could be considered for
disposal.
The need to invest in any dwelling to ensure that it continues to meet the desired
standard for letting purposes should be carefully considered against the potential
future rental stream for the property. If the investment need plus the cost of
management and maintenance for the property outweighs the anticipated rental
stream over the 30 year life of the business plan, the property should be actively
considered for disposal.
2. Unsuitable property location
On occasions the location of a particular dwelling makes it difficult to let, manage or
maintain. In these instances consideration should be given to strategic disposal,
particularly where the capital receipt can be used to replace the dwelling with
another/others in a preferable location.
3. Unsuitable property build
The construction of some of the housing stock is non-traditional. In some cases this
can make routine maintenance and future improvement works difficult or
impossible, particularly energy efficiency works. In some circumstances in may be
beneficial to dispose of such properties with a view to replacing the dwelling with
another of a traditional construction type.
Assessment / Evaluation Criteria
The ability to demonstrate value for money in respect of any acquisition or disposal is key.
The following tools may be utilised to demonstrate value for money:
1. Financial Appraisal
The decision to acquire or dispose of any property must meet the relevant criteria
as set out in this policy as well as demonstrate value for money to the Housing
Revenue Account. This value will be tested through the whole life cost of the
proposal calculated over 30 years (the lifetime of the HRA business plan).
Acquisitions
Any proposal will be expected to demonstrate that the capital outlay or cost of
purchase will be at least 75% recovered over 30 years from the additional rents
that will be received. This will ensure that the social value from taking forward
acquisitions can be demonstrated within the remaining 25%, although
preference will be given to those schemes that can show a higher net gain if
there are competing priorities.
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Disposals
A proposal to dispose of an asset must show a positive net gain to the Housing
Revenue Account over 30 years. This will show that the reduction is rent
received is more than offset by the reduction in cost that will be incurred,
including the administration costs of disposing of the asset.
2. Independent Property Valuation
An independent property valuation will be sought using recent market place
comparables to ensure validity and reflecting the process used to dispose of assets
under the right to buy approach
3. Surveys
Appropriate surveys may be conducted, and could include condition, full structural,
dilapidations, ground condition and asbestos surveys. These surveys should result
in an estimate of the potential initial and future investment need for a property,
whether it be to support the proposal to dispose or acquire the property.
4. Assessment of anticipated gain
Where an acquisition is to facilitate future development, an assessment of the
anticipated gain as a result of the purchase will need to be made. This may be best
demonstrated by the additional numbers of units that could be delivered on the site
as a direct result of the acquisition.
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