Report of the Corporate Director Housing and Environment
to
The Portfolio Holder for Tenancy Services and Housing Needs
For a DELEGATED DECISION
On
15 September 2014
Disposal of three un-occupied council 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.
1.2
This is not a key decision as it does not have a significant impact upon
more than two wards and will not generate capital receipts in excess of
£250,000.
2.
RECOMMENDATIONS
To be resolved by The Head of Portfolio Holder for Tenancy
Services and Housing Needs
(i)
That the disposal of the three properties at 24 Moor Street, 132
Leeming Lane South and 48 Wood Lane (Church Warsop) 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 been empty for several years due to the extent of work
needed to bring them back to a lettable standard. The work required
on all three properties includes underpinning and other structural work.
3.3
The property types and void dates are shown below:



24 Moor Street – 2 bed end terrace – void 10/07/05
132 Leeming Lane South – 3 bed semi-detached – void 21/12/08
48 Wood Lane – 3 bed end terrace – void 09/02/03
All three properties are in areas that have a large proportion of owner
occupied properties.
3.3
If the properties were to be retained by the Council the improvement
work is estimated to cost in in excess of £30,000 per property for the
Wood Lane and Leeming Lane South properties and could be in
excess of £50,000 for the Moor Street property. This would not be an
economical investment for the Council, as it will take approximately 10
years to recover this through rental income (not taking account of the
ongoing repair and maintenance costs associated with retaining
properties).
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.
Whilst the sale of these three individual is not expected to raise a
significant capital receipt, it would complement the proceeds from RTB
sales and thereby contribute towards helping fund the Council’s new
build programme.
4.
OPTIONS AVAILABLE
There are 2 options available: -
4.1
Option 1 (recommended) – Properties disposed by Tender/Private
Treaty or Auction.
Disposal of the properties will absolve itself of the financial liability
required to repair and modernise them, which could cost in excess of
£100,000 for all three. Also, by authorising the Corporate Asset
Manager to determine the method of disposal, the maximum capital
receipt will be achieved, which can then be used to finance the house
building programme.
4.2
Option 2 – Retain the properties
This option is not recommended, as it will leave result in the Council
needing to invest in these properties, the cost of which will take in
almost 10 years in rental income to recover (not taking into account the
ongoing management and maintenance of the properties).
5.
RISK ASSESSMENT OF RECOMMENDATIONS AND OPTIONS
Risk
Risk Assessment
Risk
Level
Risk Management
Financial
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
Sale of Council
housing could be
viewed in a
negative light by
the public given
the current
demand for local
authority housing.
Low /
Medium
This risk can be mitigated by
ensuring that information is
made available to the public
about funding new build
properties, from sale
proceeds.
Option 1 Do
Nothing
Option 1
(Preferred Option)
Dispose of the
properties
Option 2 Retain
the Properties
Financial
By retaining the
High
properties, the
Council will need
to invest heavily to
bring them back up
to a lettable
standard
(£100,000+)
It is not possible to mitigate
against this risk, as there will
be a need to repair and
modernise the properties to be
able to let them again.
Reputation
Having long term
empty properties
does not reflect
well on the
Council.
Mitigation would require a
capital investment in the
properties in order to let them.
Medium/
High
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, the sale will help to financial
assist in the cost of new build properties.
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
Any costs associated with the disposal of the properties will be offset
against the capital receipt from the sale; therefore no additional
revenue resources will be incurred.
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 omments
Section 151 Officer – Budgetary implications as outlined within the
report
Monitoring Officer – No specific comments
9.
CONSULTATION
9.1
None
10.
BACKGROUND PAPERS
None
Report Author
Designation
Telephone
E-mail
-
Paul Barker
Landlord Services Manager
01623 463269
pbarker@mansfield.gov.uk