Decision details

To purchase a property at a value in the region of an amount with negotiation to a maximum amount

Decision Maker: Director City Development, Housing & Supporting People

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: No

Purpose:

To purchase a property at a value in the region of an amount with negotiation to a maximum amount.

 

Reasons for the decision:

To make best use of the Council’s Housing Assets, increase stock provision and rental income.

 

This property is a one bedroomed first floor flat and is currently the sole leasehold property within a block of flats designed as Older Persons accommodation. The property was purchased under the RTB prior to the Older Persons designation. There is a restriction on the lease preventing any child under the age of 12 from residing at the property.

 

The Council has received an offer by the current leaseholder to purchase the property and it has been valued by the Authority’s Valuer in the region of £125,000.

 

ECC wishes to make an initial offer of £120,000 (with a view to negotiating to a maximum value of £127,000) and purchase the property for the following reasons:

 

·         Our current Asset Management Strategy states that we will dispose of one off properties away from our concentration of stock and reinvest in properties that are located within our current portfolio. This will be more cost effective as these properties will be less costly to maintain operationally. 1a faraday House fulfils the latter part of this strategy.

·         ECC will benefit from the reduced leaseholder obligations.

·         If the property were to remain as leasehold, the owners would not be restricted in privately renting to people who are over the age of 60, which might cause a disturbance in the dynamics of the current residents, some of whom are vulnerable.

·         Our staff and contractors are familiar with the archetype for the purposes of effecting repairs and planning programmed works.

 

If the property is purchased at £120,000 will have a nil stamp duty. If it is purchased at £125,000 there will be an additional £1250 to pay (1%) in stamp duty.

 

Alternative options considered:

This is the best option and will seek to streamline the HRA Portfolio, reducing operational costs for repairs and planned works.

 

Publication date: 14/06/2019

Date of decision: 14/06/2019