Agenda item

This item is due to be pre-scrutinised at a meeting of the Overview and Scrutiny Committee scheduled to take place on 7^th July 2025.  Any recommendations on this subject arising from that meeting will be reported for the Executive Committee's consideration in a supplementary pack.

The Strategic Housing Services Manager presented a report on the subject of the Housing Growth Programme.

The Executive Committee was reminded that the Council already had a Housing Growth Programme.  The Council received funding in this programme through a process of one-for-one receipts when Council houses were sold.  Under current rules, the Council had the right of refusal in the first ten years after a resident purchased a former Council house. In recent months, the Government had announced that changes would be made to the rules in respect of Right to Buy.  Whilst the legislation which would contain the detail had not yet been issued, the Government had advised that these changes would include giving Councils a right of refusal over sales of Council houses indefinitely.  Eligibility amongst Council tenants to apply to purchase a Council property under Right to Buy was also due to be extended from tenants who had lived in a property for three years to those who had lived in a property for five years or more.  In addition, the Government was proposing that any new Council houses built by a local authority should not be eligible to sell for 35 years after development.

The Council would not necessarily want to purchase all properties available under the right of refusal process.  There was a particular need for more properties that would be suitable to accommodate families.  Sometimes, there were challenges that arose in terms of the Council determining whether to purchase properties under the right of refusal process as often estate agents and solicitors did not highlight that a property subject to these rules was due to be sold until a potential purchaser had been identified and the parties were due to complete the sale.

Under the current terms of the Council Housing Growth Programme, there was a capital budget of £3 million per year to spend on developing or purchasing new Council houses.  Once this figure was spent, additional funding could not be accessed without agreement from the Executive Committee.  Officers were asking for greater flexibility in the Council Housing Growth Programme to enable expenditure over this level where needed and this would help the Council to respond to opportunities on the open market as they arose in a timely manner.

When developing new properties, Officers were aiming to install materials and to use design methods that would ensure that those properties achieved an Energy Performance Certificate (EPC) A rating.  This would have both a positive impact on climate emissions and help to reduce the energy costs that needed to be met by tenants living in those properties.

Once the report had been presented, Members discussed the following points in detail:

·             The need for the Council to issue communications to owner occupiers living in former Council properties about the authority’s first right of refusal on the sale of their properties.

·             The target number of properties that the Council was aiming to build by 2030 under the Council Housing Growth Programme. 

·             The potential for the Council to work with other organisations, such as Homes England, to develop further Council house properties in addition to that target figure.

·             The social housing units developed by other Registered Providers in the Borough.

·             The extent to which the £15 million Council Housing Growth Programme included properties that had already been developed under the scheme.  Officers confirmed that this funding was available to support properties that were due to be added to the Council’s housing portfolio in the future.

·             The reasons why the Council tended to find out that former Council houses were being sold late in the process when the Council had the first right of refusal.  Officers explained that there appeared to be a lack of awareness and therefore the Council was liaising with local estate agents to try to raise awareness.

·             The impact that the Council Housing Growth Programme had had on the housing waiting list in the Borough.  Officers explained that there had been 2,692 households on the housing waiting list in May 2025 and the relatively low numbers of houses that were being built could only provide accommodation to a small number of these people.  Members were also asked to note that households were added to the housing waiting list all the time, so the levels of demand were constantly changing.

·             The extent to which the Council retained records of former Council houses that had been sold to residents over the years.  The Committee was informed that Right to Buy had been introduced in the 1980s and old records were recorded on microfiche.  Later records had been recorded electronically and the Council could refer to this when considering the applicability of right of refusal to a particular property.

·             The important role of Right to Buy in terms of enabling tenants to get onto the property ladder.

·             The likelihood that indefinite right of refusal would only apply to new properties developed or purchased by Councils and would not apply retrospectively.

·             The potential for the Council to change a decision in respect of whether to purchase a former Council property under the right of refusal.  Officers clarified that it was understood that once a Council had turned down the opportunity to purchase a property that was up for sale then the right to refusal would end.

RESOLVED that

1)          The following options for the Council Housing Growth Programme be approved:

a)          commissioning the construction of new Housing Revenue Account housing stock;

b)          purchasing existing housing properties on the open market;

c)          bidding to purchase housing properties provided by developers through the Section 106 process;

d)          purchasing properties ‘off plan’ from new housing developments;

e)          purchasing housing stock from other Registered Providers of social housing; 

f)            regeneration of existing housing stock where additional units are achieved; and

g)          buying back former Council house properties under the Council’s ‘First Right of Refusal’;

2)          authority be delegated to Deputy Chief Executive and Chief Finance Officer and the Assistant Director of Communities and Housing, following consultation with the Portfolio Holder for Housing and the Portfolio Holder for Finance, to approve the financial and development appraisal of each site in Appendix 1 and future development sites; and

3)          the Buy Backs and Acquisitions Policy be approved.

The Executive Committee RECOMMEND that:-

4)          the budget of no more than £15 million previously approved from the HRA Capital budget for the Housing Growth programme to 2030 be applied to the current capital programme to be used flexibly within the capital expenditure limit;

5)          properties delivered through the Council Housing Growth Programme are let at social rent levels, where permitted and subject to viability;

6)          in cases where resolution 2 is unviable, to approve rent levels at:

a)    65% of the market rent; or

b)    in cases where resolution 6(a) is unviable, at affordable rent levels of 80% of the open market rent level; and

7)          that the Council’s rent setting policy be updated as per recommendations 5 and 6 above.