Agenda item

Cabinet Members' Items - Report of the Housing Portfolio Holder - A.5 - Jaywick Sands - Future of New Build Homes & Applications to Homes England regarding Designated Protected Areas

(1)    To update Cabinet on the current situation regarding the Council’s recently built discounted homes for sale in Jaywick Sands and to recommend an alternative option for the future of the dwellings; and

 

(2)    To seek delegations for applications to be made to Homes England for the waiver of Designated Protected Areas.

 

Decision:

RESOLVED that Cabinet - 

 

(a)    notes the contents of the Portfolio Holder’s report;

 

(b)    agrees to the retention of the five unsold properties within the Council’s housing stock for letting in accordance with the local lettings and sales plan;

 

(c)    authorises the Corporate Director (Operations & Delivery), in consultation with the Portfolio Holder for Housing, to sign any amended grant agreement proposed by Homes England in respect of the Starter Homes funding received in 2015; and

 

(d)    authorises the Assistant Director (Housing & Environment), in consultation with the Portfolio Holder for Housing, to make applications, where appropriate, to Homes England for the waiver of Designated Protected Areas made under the Leasehold Reform Act 1967 and The Housing (Right to Enfranchise) (Designated Protected Areas) (England) Order 2009.

 

Minutes:

Cabinet considered a report of the Housing Portfolio Holder (A.5) which updated it on the current situation regarding the Council’s recently built discounted homes for sale in Jaywick Sands and which recommended an alternative option for the future of the dwellings. The report also sought the appropriate delegations for applications to Homes England for the waiver of Designated Protected Areas.

 

In November 2017, Cabinet had endorsed the development of 10 new homes in Jaywick Sands, with five to be retained in the Council’s housing stock and the other five to be offered for discounted sale to Key Workers in line with the Government’s Starter Homes policy. Cabinet had also endorsed the adoption of a Local Lettings and Sales Policy for the site in March 2021.

 

It was reported that, whilst the five homes for rent had now been let in accordance with the Council’s lettings policy, the five homes for discounted sale remained vacant and had been marketed for sale since March 2021.  So far, none had been sold for the reasons set out within the Portfolio Holder’s report. Cabinet considered an alternative option to retain the homes as part of the Council’s housing stock and held in the Housing Revenue Account and let in accordance with the Council’s lettings policy.

 

Members were informed that Homes England had agreed that, under certain conditions, it would waive particular conditions of its grant relating to Designated Protected Area (DPA) status.  This would enable Registered Providers to develop grant funded shared ownership stock on those sites (not within the Council’s ownership) and allow buyers to staircase to 100% without an obligation on the provider to buy back the property if the leaseholder wished to sell.

 

In order to consider waiving the DPA lease requirements Homes England required an application to be made by the relevant Local Authority.  If the Authority considered that a particular site to be developed did not meet the criteria set out in the original classification of why an area should be protected, or indeed had other reasons why they thought that grant funded shared ownership stock did not need to be protected in perpetuity, they could approach Homes England to request that the conditions of grant pertaining to Designated Protected Area status be removed. This relaxation specifically related to Homes England’s conditions of grant for shared ownership homes developed in DPAs. It was not related to rural exception sites or other Section 106 agreements.

 

Cabinet was advised that a number of alternative options had been considered including altering the sale price, altering the sales policy and creating a rent to buy option. In summary, the options considered were:-

 

Options Appraisal

 

Option

Pros

Cons

Option 1

Retain the current asking price and keep the policy unchanged i.e. retain the status quo.

Offers the best possibility to maximise income and to meet the criteria set out in the policy 

The lack of interest expressed so far at a time where the housing market remains buoyant means that extra costs are being incurred in terms of council tax and security for the site and the homes may be over-valued making sales more difficult. A failure to achieve occupation of the homes could damage the Council’s reputation.

Option 2

Retain the current asking price but amend the terms of the policy to make it less restrictive. 

Opens up the potential for more people to purchase the dwellings subject to there still being some eligibility criteria e.g. the requirement to occupy as an only or principal home to deter buy-to-let or other investors.

There is no guarantee that the homes will be sold to Key Workers or residents in Jaywick Sands as originally intended albeit the policy does allow the homes to be sold to households who have resided in the District for at least three years.

 

Option 3

Reduce the asking price but keep the policy unchanged.

Reducing the asking price will potentially allow Key Workers or residents of Jaywick Sands to purchase the homes in line with the adopted policy.

Reducing the price will impact on the revenue the Council receives from the future sales.

 

 

 

 

Option 4

Reduce the asking price and amend the policy.

Reducing the asking price and amending the policy will maximise the opportunities to sell the homes. The Council can still insist on some eligibility criteria but less restrictive than currently.

Reducing the price will impact on the revenue from future sales and amending the policy to shift the homes away from an affordable housing product could result in having to repay some or all of the £200, 000 the Council received from the Homes and Communities Agency to fund starter homes on the site

Option 5

Seek to sell the homes as a different product and retain the current valuation and existing policy. 

The Council could look to sell the homes on a shared ownership basis so they are more affordable for Key Workers or eligible applicants. The homes will remain an affordable housing product and applicants can eventually purchase the property outright.

As the Council will only be selling a share of the homes’ value, the Council will not receive the anticipated revenues through sales costs. There is little expertise at the Council for the sale and management of shared ownership homes. Applicants may have difficulty obtaining a shared ownership mortgage as the number of providers offering shared ownership mortgages is limited.

Option 6

End plans to sell the homes and convert into social rental homes – the proposed option.

Renting the homes will result in them being occupied quicker and they will be let to households in need on the Housing Register. The lettings criteria in the policy to give priority to Jaywick Sands residents will still apply.

The Council will receive no revenue from sales, but as a stock-retained landlord, the Council has sufficient expertise to manage socially rented homes. However, the Council has publically stated the homes are for sale and not rent which could affect its reputation. Converting the homes into social rented homes may require the Council to pay back the grant it received under the Starter Homes funding initiative.

 

With the permission of the Leader, Councillor Casey addressed the Cabinet on the subject of this matter.

 

In an effort to bring these dwellings into use as soon as possible and in order to provide an appropriate delegation to Officers to make Designated Protected Area waiver applications on behalf of Registered Providers as required by Homes England:-

 

It was moved by Councillor P B Honeywood, seconded by Councillor G V Guglielmi and:-

 

RESOLVED that Cabinet - 

 

(a)    notes the contents of the Portfolio Holder’s report;

 

(b)    agrees to the retention of the five unsold properties within the Council’s housing stock for letting in accordance with the local lettings and sales plan;

 

(c)    authorises the Corporate Director (Operations & Delivery), in consultation with the Portfolio Holder for Housing, to sign any amended grant agreement proposed by Homes England in respect of the Starter Homes funding received in 2015; and

 

(d)    authorises the Assistant Director (Housing & Environment), in consultation with the Portfolio Holder for Housing, to make applications, where appropriate, to Homes England for the waiver of Designated Protected Areas made under the Leasehold Reform Act 1967 and The Housing (Right to Enfranchise) (Designated Protected Areas) (England) Order 2009.

 

Supporting documents: