Decision details

Matter for Decision:  

A review of the Council’s shared ownership service had been carried out to assess whether shared ownership should continue to be part of the Council’s core business within the context of Housing Revenue Account (HRA) self-financing, and if so whether it should also be offered on the Council’s new developments.

 

The report recommended that the service be continued, with some improvements, and that shared ownership be offered on new affordable housing developments to cross-subsidise the building of rented units and to help create balanced communities.

 

Decision of Executive Councillor for Housing:

 

The Executive Councillor resolved:

 

i.        That the Council continues to provide a shared ownership scheme.

ii.        That officers are granted delegated authority to develop a business case for each property which comes up for resale, and to assess – according to a set of agreed criteria - whether to:

a)           Buy back and sell a share to another applicant, or

 

b)           Buy back to use as rented stock, or

 

c)           Buy back and sell the whole property on the open market, or

 

d)           Advise the seller to sell their share on the open market.

 

iii.         That the criteria to take into account in the decision on what to do with an individual property under paragraph ii above should be as follows:

a)           The costs to the Council of each of the options, the funding available, and the potential impact on the Business Plan;

b)           Whether there is an identified alternative need for that property to be used for rent which should take priority over re-selling as shared ownership. Eg: a property which is disabled adapted or particularly suitable to be adapted to meet the needs of an identified housing applicant;  one which would suit the needs of a leaseholder needing to move as part of the Council’s Affordable Housing development programme; etc.

c)           Rental and shared ownership demand for that particular type or size of property;

d)           The condition of the property;

e)           Whether the property is in a specific location that could free up land or access to land, or otherwise facilitate affordable housing development;

f)            The anticipated capital receipt (subject to pooling requirements);

g)           Housing market conditions at the time, including mortgage availability;

h)           Any planning restrictions which may apply (eg s106 restrictions around disposal on the open market);

i)             Any other factors which need to be taken into account to ensure that the best use is made of the property, and where value for money can be clearly demonstrated.

iv.        That shared ownership homes are provided on Council’s new developments where appropriate – eg at Clay Farm and on other new Affordable Housing Development Programme sites – to cross-subsidise rental build and help create balanced communities, in line with the requirements of Council’s Local Plan and Affordable Housing Supplementary Planning Document. On sites under the Council's Affordable Housing Development programme where the tenure mix has already been agreed, properties already planned to be provided for rent will not be provided as shared ownership.

 

v.        That the current policy which seeks to ensure that housing is made available at a price which could be afforded by a household with ‘1 average earner (for 1 bedroom accommodation) or 1.5 average earners for larger properties, using standard income multiples be removed.

vi.        That the policy at paragraph v. above be replaced with one which states that the Council seeks to ensure that an alternative form of housing is available as an option to those who would not normally be eligible for social housing, but who are unable to afford to purchase on the open market.

vii.        That new eligibility criteria are introduced for applying for shared ownership housing as follows:

a)           Applicants must have a gross household income of up to £60,000 (subject to any future change in the national income requirement for intermediate tenure housing);

b)           Applicants must be first time buyers, other than in exceptional circumstances. Exceptional circumstances may include: in relationship breakdown where children are involved;  where an owner-occupier needs significant disabled adaptations which cannot be  provided in their own home and they cannot afford to purchase a more suitable home; or existing shared owners who have medical needs which require them to move to a more suitable property.

viii.         That new criteria be introduced to decide the priority between more than one applicant for a particular property. Criteria should be ranked in the following order:

a)           Applicants who  have the resources to go ahead with a purchase;

b)           Applicants who live or work within the City;

c)           Level of need, assessed in line with the  Council’s Lettings policy in place at the time;

d)           Date of registration on the Help to Buy register.

ix.         That applicants should not be able to purchase if they owe any housing-related debt to the Council where reasonable steps have not been taken to repay it.

x.        That applicants should not be able to purchase if they have a history of unacceptable behaviour which would make them ineligible to be accepted onto the Home-Link register.

xi.        That staircasing be promoted where it makes business sense to do so (subject to pooling requirements).

xii.        That if buying a property back to sell it on, consideration is given to restarting the lease at 99/125 years if not doing so may make it difficult for the purchaser to re-mortgage at a later date.

xiii.        To agree the option of using individual HRA rented properties for shared ownership in appropriate circumstances.

xiv.        That if a rented property is converted to shared ownership, an appropriate alternative shared ownership property is converted to rent as soon as is reasonably practicable, to ensure that the number of rented properties is not reduced as a result.

xv.        That leases are reviewed for new leaseholders in conjunction with drafting of leases for newly developed shared ownership properties.

xvi.        That the marketing of shared ownership properties be improved.

xvii.        That information provided to leaseholders about their and the Council’s rights and responsibilities be improved.

xviii.        That equity share is not pursued at this stage, as an alternative option to shared ownership (as capital outlay is high, and returns are much longer term and rely on values continuing to rise), other than for leaseholders on redevelopment sites.

xix.        That the revised scheme be reviewed in around three years’ time to establish the impact of changes, and assess whether further changes are required in light of any further development in national thinking.

 

Reason for the Decision:

As set out in the Officer’s report.

 

Any Alternative Options Considered and Rejected:

Not applicable.

 

Scrutiny Considerations:

The Committee received a report from the Housing Strategy Manager regarding the Shared Ownership Review.

 

The report was welcomed and the Committee agreed that shared ownership was important and added to the mix of residents on any given site. However, some concern was expressed regarding the provision of shared ownership properties reducing or diluting the provision of social housing for rent – particularly on the Councils redevelopment sites. The Committee discussed adding additional wording to the recommendation to make the commitment to social rented properties explicit.

 

The Director of Customer & Community Services and the Head of Strategic Housing were concerned that this needed to be worded carefully to ensure it did not cause problems at a later date. Each scheme was judged on its merits for smaller sites, an inflexible approach would be counter-productive. The Director of Customer and Community Services suggested that the Executive Councillor, Chair and Spokes propose some wording to be added to item (iv) of the recommendations to address the concerns of the Committee.  Additional wording to be agreed with officers.

 

The Committee resolved unanimously to endorse the recommendations subject to the above revisions.

 

The Executive Councillor approved the recommendation.

 

Post Meeting Notes

On the 10^th February 2014 the Chair, Executive Councillor and Spokes agreed that the following wording be added to recommendation (iv).

 

On sites under the Council's Affordable Housing Development programme where the tenure mix has already been agreed, properties already planned to be provided for rent will not be provided as shared ownership.