Issue - meetings

[Report of the Director for Planning, Regeneration and Development. To be introduced by the Cabinet Member for Housing, Regeneration and Planning.] The report will seek determination of tenures and rent levels for new homes nearing completion as part of the first phase of the Council's new build programme.

The Cabinet Member for Housing, Regeneration and Planning was pleased to inform  Cabinet that the first phase of new rented Council homes, included in the Council’s new build programme, were nearing completion and would be available for social letting in September 2016. In order for the homes to be let, the Cabinet would need to agree rent levels to be applied which the report set out.

Cabinet were asked to note planned changes to the unit mix and tenure type since the programme had started, two years ago. This was due to significant changes in the  housing landscape, including: decreased housing funding and income for local authorities, a 30% increase in construction inflation. This meant that the cost of this first phase of housing had increased. However instead of selling these units, the Council were keen to keep these units in their much needed housing stock .

Therefore, the rents were proposed to be set in accordance with the guidance in draft Housing strategy; for example the maximum rent levels of 70 % of market rent value for 1 bedroom accommodation instead of 80% of market value would be applied. While the rents were higher than envisaged, the levels were still in the affordability range of residents on benefits who would still be able to afford the rents.

RESOLVED

1. To approve  the setting of rent levels for the Council’s Phase 1 new homes in accordance with the affordable rents guidance set out in the draft Housing Strategy, as set out in paragraphs 6.13 - 6.14.

2. That the revised unit type and tenure mix as described in paragraph 6.11 and detailed in table 3 in appendix B be noted.

Reasons for decision

The Council’s Phase 1 new homes were anticipated to be available in phases between September 2016 and March 2017.  The Council needs to set rent levels on the properties for rent prior to their completion and availability in order to advertise the properties to prospective bidders.

Changes affecting the programme since it was originally approved mean that it will not pay back over thirty years as planned.  Approval of the proposals will contribute to improving the financially viability of this phase of the Council’s new build housing programme.

Alternative options considered

The option of proceeding without any changes to the planned tenure mix, unit sizes and rent levels was considered. This is not favoured because it would not increase the number of units, or improve the bedroom size mix, or make any contribution to reducing the current financial deficit on the programme.

Outright market sale of some units was considered.  This option would reduce the supply of much-needed affordable homes and in addition to this, the Council has already drawn down monies from the GLA through the grant funding agreement with a commitment to deliver these affordable dwellings. Changing to outright sale is thus not considered a viable approach.