Report of the Corporate Director of Housing & Environment to
the
Portfolio Holder for Tenancy Services and Housing Needs
For a DELEGATED DECISION
On
13 June 2013
Disposal of Unoccupied dwelling houses
1.
SUMMARY
1.1
This report seeks approval to declare surplus to requirements three
properties held within the Housing Revenue Account portfolio and for
the properties to be disposed of by Property Services, thus generating
a Housing Revenue Account capital receipt, which is to be used to help
facilitate the Council’s new build programme.
1.2
This is a key decision as it affects more than two wards and may
generate capital receipts in excess of £250,000 and first appeared in
the Forward Plan for the period March 2013.
2.
RECOMMENDATIONS
To be resolved by Portfolio Holder for Tenancy Services and
Housing Needs
(i)
That the disposal of the unoccupied dwelling houses situate at
properties 1 Rannoch Drive, 12 Coggins Lane (Warsop) and 70
Worcester Avenue (Mansfield Woodhouse) be approved.
(ii)
That Property Services be instructed to dispose of the properties
and that the method of disposal be determined by the Council’s
Corporate Asset Manager.
3.
BACKGROUND
3.1
The Council’s Asset Management Plan contains a section on Asset
Disposal Policy and sets out how land and property is identified as
being surplus to requirements.
3.2
As part of the day to day management of Council owned housing three
properties have recently become available which are considered to
have a higher than normal asset value, when compared to other more
traditional types of council housing. This is due to a combination of the
individual property sizes, locations and overall footprints of the
properties which may give some potential for the properties to be
extended.
3.3
In respect of 70 Worcester Avenue and 12 Coggins Lane the Council
does not own any other properties on these two streets. In addition to 1
Rannoch Drive the Council owns one other property on this street
(number 7).
3.4
The Council is committed to delivering a programme of building new
homes for Council tenants across the district and in September 2012
signed up to the Governments Right to Buy (RTB) replacement
programme which enabled the Council to retain the receipts from RTB
sales for re-investment in the construction of more affordable homes.
The sale of these three individual properties would raise a significant
capital receipt and would complement the proceeds from RTB sales
and thereby contribute towards helping fund the Council’s new build
programme.
3.5
This approach is strategically significant as it will enable the council to
not only increase its stock, but it will improve the quality of that stock,
create much needed employment opportunities and maximise the
assets to their full potential.
3.6
The Council’s Property Services section has carried out a valuation of
the properties and an assessment of potential enhancements to the
value in the event that the properties are sold with outline planning
permission for individual extensions. It is felt that by disposing of the
properties with outline planning permission for a suitable extension that
this may result in a higher value at the point of sale, thus increasing the
capital receipt generated for the Council.
3.7
Alternatively, if these properties were made available for Council
tenants to rent, then they would be in high demand due to their
location, size and quality and the Council would not have any difficulty
in letting them, however, this approach would not maximise the full
potential of the assets.
4.
OPTIONS AVAILABLE
4.1
There are 2 options available: -
4.2
Option 1 – Do Nothing.
The properties could be repaired through the normal voids process and
advertised for rent. It is likely the properties would be in high demand
and the Council would receive an ongoing rental income from the
properties. The Council would however retain costs associated with
ongoing repair and maintenance.
4.3
Option 2 – Properties disposed by Tender/Private Treaty/Auction Recommended
4.4
Disposal of properties will generate a significant capital receipt for the
Council which can be used to help fund the Council’s new build
programme. It is felt the sale of the three properties will generate
capital receipts that will enable more new Council owned properties to
be built to replace those that have been sold, thus increasing the
Council’s overall level of stock in the longer term. The Corporate Asset
Manager will determine the method of disposal and this may vary on a
property by property basis depending on factors such as location, size,
planning and development potential and market conditions.
5.
RISK ASSESSMENT OF RECOMMENDATIONS AND OPTIONS
Risk
Risk Assessment
Risk
Level
Risk Management
Retention of the
three properties
would require
ongoing repair and
maintenance costs
or the properties
would fall into
disrepair
Low
The properties could be
repaired through normal day
to day repair processes
supported by ongoing capital
programmes of work.
Financial risk
The sales may not
proceed in a timely
manner or achieve
sale price.
Low /
Medium
Property Services will carry
out pre sale investigations
prior to disposal including
obtaining necessary consents
were applicable. Each site will
be actively marketed to
ensure best consideration is
achieved in a timely manner
and realistic reserve prices will
be listed on each site.
Reputational risk
Sale of Council
housing could be
viewed in a
negative light by
Low /
Medium
This risk can be mitigated by
ensuring that information is
made available to the public
about funding new build
Option 1 Do
Nothing
Financial Risk
Option 2
(Preferred Option)
Dispose of the
properties
the public given
the current
demand for local
authority housing.
properties, from sale
proceeds, through the media /
newsletters etc
6.
ALIGNMENT TO COUNCIL PRIORITIES
6.1
In accordance with the Asset Management Plan, the council has to
ensure its land and property assets are used effectively for the delivery
of services either directly in the case of operational properties or
indirectly with non-operational properties (e.g. investment properties).
In the case of the above three properties, these will be replaced by a
larger number of new build properties, thus increasing the Council’s
overall stock in the longer term.
6.2
Ensuring there is an adequate supply of good quality, well managed
housing which is accessible and affordable to those who need it is one
of the Council’s corporate priorities and links directly with the contents
of this report.
7.
IMPLICATIONS
7.1
Relevant Legislation
a) The General Housing Consents 2013 allows the Council to dispose of
land for a consideration equal to its market value. The Consent also
allows the Council to dispose of an unoccupied dwelling house to a
person who intends to use it as their only or principal home so long as
the price is not less than the amount equal to the purchase price as
defined in the Housing Act 1985 s(126) (Right to Buy purchase price)
to which the minimum discount, as provided by s129 has been applied.
The Council also has a duty under Section 123 of the Local
Government Act 1972 to obtain best consideration in the disposals of
its assets.
b) Human Rights
It is not considered individual rights will be infringed.
c) Equality and Diversity
There are no equality and diversity issues
d) Climate change and environmental sustainability
It is not considered that the decision will have an effect on climate
change.
e) Crime and Disorder
It is not considered the decision will have any effect on crime and
disorder.
f) Budget/Resource
There will be some sales costs associated with disposal of the
properties but these and costs associated with obtaining outline
planning approvals for property extensions, will be met from existing
Housing Revenue Account (HRA) budgets.
Under the HRA pooling system local authorities are able to retain all of
their non-Right To Buy receipts provided they are used for affordable
housing, regeneration schemes or the repayment of housing debt.
8.
COMMENT OF STATUTORY OFFICERS
Head of Paid Service – No specific comments
Section 151 Officer – All budgetary implications are contained within
the report
Monitoring Officer – No specific comments
9.
CONSULTATION
9.1
Internal consultation has taken place between various officers within
Housing and Property Services to identify these properties and discuss
their respective opportunities for sale.
10.
BACKGROUND PAPERS
None
Report Author
Designation
Telephone
E-mail
-
Neil Turton
Tenancy Services Manager
01623 463741
nturton@mansfield.gov.uk