Decision details

To purchase a property at a value (being half the value of the property, as determined by the Council's valuer)

Decision Maker: Director - Bindu Arjoon

Decision status: Recommendations Approved

Is Key decision?: Yes

Is subject to call in?: No

Purpose:

To purchase a property at a value (being half the value of the property, as determined by the Council's valuer)

Reasons for the decision:

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

 

The property is a three bedroomed terrace house, built in the late 1970s, which forms part of a small portfolio of shared ownership properties sitting within the HRA. The current tenant/occupier of the property has recently died and the family now wish to sell the shared ownership lease (less any rent arrears owing) back to the Council.

 

ECC wishes to make an initial offer of £xx (with a view to negotiating to a maximum value) and then re-sell the property on the open market at a higher value. The Council wishes to 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.

·         The cost to purchase the lease and return the property to the open market would provide a more cost effective method of managing the property and would not go against the original principles of the Asset Management Strategy by retaining a property against the concentration of stock.

·         The financial gains achieved by selling the property for a higher value that the cost of purchasing the lease will provide additional funds to reinvest in stock which better firs the criteria of the Asset Management Strategy.

 

Alternative options considered:

This is the best option and will seek to streamline the HRA portfolio, notably to reduce the administrative costs of managing a shared ownership portfolio and provide additional funds to re-invest in more suitable properties.

 

Publication date: 04/07/2019

Date of decision: 04/07/2019