DECISION

1.    Noted the current position with regard to the Council’s housing provision and anticipated housing demand as set out in paragraph 3 and Appendix A to the report.

2.    Authorised the Corporate Director, Place, to purchase housing

stock either within or outside the borough as outlined below, including properties with a purchase value exceeding £250k and to procure services and works to bring the properties up to the required standards for letting where necessary.

3. Authorised the Corporate Director, Place, to procure services and works and to let contracts in the delivery of the new homes in as far as required to fulfil the recommendations detailed below.

4.    Agreed to adopt a capital estimate of £30million for the purchase of up to a maximum of 100 properties out of borough, subject to these satisfying conditions of affordability, suitability, and good quality management.

5.    Agreed to allocate £9m retained Right to Buy Receipts to fund 30% of the capital costs and £21m to finance the residual 70% of the capital costs from Council capital resources, including undertaking prudential borrowing within the General Fund as necessary.

6.    Authorised the Corporate Director, Place, to utilise surplus Council properties for temporary housing, and to procure services and works for conversion of those units as appropriate.

7.    Agreed to adopt a capital estimate of £2.25million to create up to 50 units of temporary accommodation from surplus council properties.

8.    Authorised the Corporate Director, Place, to investigate the use of Off-Site Manufacturing for temporary accommodation supply.

9.    To require the Corporate Director, Place, to consult the Mayor regarding any purchase beyond a 60 minute journey time from the Borough or within any District outside London, other than those immediately bordering another London Borough.

10.Agreed to require the Corporate Director, Place to consult the Corporate Director, Resources regarding any purchase that would result in the portfolio average breakeven period exceeding 10 years or the net yield achieving less than 10%.

Action by:

CORPORATE DIRECTOR, PLACE (A. DALVI)

(Interim Divisional Director, Housing and Regeneration (M. Baigent)

(Acting Divisional Manager (J. Coker)

A report was received and noted that sought approval in principle for a number of proposals to provide temporary accommodation by the Council to meet the needs of homeless households. This included the:

1. Accelerated acquisition of new housing stock in the East London corridor and beyond to provide greater choice for people willing to move beyond Tower Hamlets borough boundaries;
2. Utilisation of the Council surplus properties as appropriate for temporary accommodation use for up to ten years; and
3. Investigation of the use of off-site manufactured units for temporary accommodation.

It was noted that internal modelling had been undertaken assessing the implications of purchasing two bedroom flats out of borough. The capital acquisition costs it was noted are estimated at approximately £300,000 per unit, equating to £30 million for the proposed 100 units. Financing the maximum 30% of these costs from retained Right to Buy capital receipts (£9 million) will mean that capital resources of £21 million will be required. The modelling it was noted assumes that the Council will borrow these resources within the General Fund, although alternative capital resources could be used if available.

It was also noted that there are proposals that 100 properties are purchased and that a target of total revenue savings of £500,000 had been included at this stage. External valuers, Roughton International Limited (RIL), were commissioned to investigate this proposal, including study of an exemplar borough. Allowing for the time that will be required to acquire suitable properties, it is proposed that the saving is profiled as £200,000 in 2017-18 and £300,000 in 2018-19.  Whilst an additional capital estimate of £2.25m is proposed to deliver a further programme of 50 units that utilise surplus council properties for temporary accommodation for up to ten years. These properties will be funded from both the Housing Revenue Account and the General Fund as appropriate.

According the Mayor agreed the recommendations as set out in the report.

RESOLVED

1.    To note the current position with regard to the Council’s housing provision and anticipated housing demand as set out in paragraph 3 and Appendix A to the report;

2.    To authorise the Corporate Director, Place, to purchase housing stock either within or outside the borough as outlined below, including properties with a purchase value exceeding £250k and to procure services and works to bring the properties up to the required standards for letting where necessary;

3. To authorised the Corporate Director, Place, to procure services and works and to let contracts in the delivery of the new homes in as far as required to fulfil the recommendations detailed below;

4.    To agree to adopt a capital estimate of £30million for the purchase of up to a maximum of 100 properties out of borough, subject to these satisfying conditions of affordability, suitability, and good quality management;

5.    To agree to allocate £9m retained Right to Buy Receipts to fund 30% of the capital costs and £21m to finance the residual 70% of the capital costs from Council capital resources, including  ...  view the full minutes text for item 5