Decision Maker: Director City Development, Housing & Supporting People
Decision status: Recommendations Approved
Is Key decision?: No
Is subject to call in?: No
To purchase the 50% lease of 2 Mercer Court, Bishop Westall Road, Exeter, EX2 6WL at a value in the region of £90,000 (this being the value of the leasehold interest, as determined by the Council’s valuer) there will be additional costs of £2,700 for Stamp Duty on the purchase.
To purchase the 50% lease of 2 Mercer Court, Bishop Westall Road, Exeter, EX2 6WL at a value in the region of £90,000 (this being the value of the leasehold interest, as determined by the Council’s valuer) there will be additional costs of £2,700 for Stamp Duty on the purchase
To make 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 their half of the lease (less any rent arrears owing) back to the council.
The property has been inspected by the ECC valuer who notes that it is in a fair condition but would need a new kitchen and bathroom to bring it to a lettable standard. In the view of the valuer, and in the current condition, the property would attract around £210,000 as a freehold property on the open market. ECC wishes to make an initial offer of £90,000 (with some small scope for negotiation) and take into account additional costs of £2,700 for Stamp Duty, and then re-sell the property on the open market at a value of around £210,000.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 remaining proportion of 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 than the cost of purchasing the lease will provide additional
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 reinvest in more suitable properties.
Publication date: 11/01/2021
Date of decision: 17/03/2020