Agenda item

Report of the Corporate Director of Finance and Resources (S151 Officer). To be presented by the Cabinet Member for Housing & Planning (Deputy Leader)

DECLARATIONS OF INTEREST MADE FOR THIS ITEM:

None

RESOLVED:

That Cabinet:

1.    Approved the disposal of nine open?market sale units on the terms and in accordance with the Sales Strategy set out in paragraph 7 of this report.

2.    Granted delegated authority to the Delivery Director and the Section 151 Officer, the Corporate Director of Finance and Resources, to dispose of each of the nine sale properties as part of the development at 100 Woodside Avenue, as shown in the Exempt Part of this report, for the total capital receipt set out in the Exempt Part, and to approve the final terms of the disposal, and to enter into the contract and any associated documentation in connection with the disposal.

3.    Granted delegated authority to the Delivery Director of Housing Delivery and the Section 151 Officer, the Corporate Director of Finance and Resources, to make minor amendments to the Sale Strategy at paragraph 7 of this report.

4.    Approved the increased budget as set out in the Exempt Part of this report.

Reasons for decision:

Haringey had an ambitious and successful council?house building programme which, since its launch in 2018, had already delivered 840 new completed council homes, with the vast majority welcoming new tenants and their families in the previous 18 months. Separately, more than 1,500 homes were under construction. This important programme made a valuable and central contribution to addressing the pressing need for genuinely affordable accommodation in Haringey and reducing the overall costs of temporary accommodation.

The scheme at 100 Woodside Avenue, where construction had been under way for more than a year, would deliver 32 new council homes in the west of the borough (Muswell Hill), as well as nine homes for market sale. The sale of these homes would cross?subsidise the 32 council homes, bringing financial viability to the whole scheme.

The Council had already received consent to dispose of the nine homes for market sale at its Cabinet meeting on 8 November 2022 (Minute 83). The Cabinet report of November 2022 approved the disposal of the leasehold interests in the nine market?sale units: seven flats on 125?year leases and two houses on 999?year leases. This report now sought authority to dispose of the leasehold interest in the seven flats on 999?year leases and the freehold interest in the two houses due to better marketability.

The proposed disposal of nine units—two houses (freehold disposals) and seven flats (999?year leases)—was permitted under paragraph A.3.1 of the General Housing Consent 2013. These consents related to disposals of HRA properties under section 32 of the Housing Act 1985 and permitted a local authority, subject to certain limitations not applicable to this transaction, to dispose of land for a price equal to its market value.

As the homes were within 12 months of completion, the Council needed to finalise an agreed sales strategy and sale mechanism that would allow sales within the housing development programme to follow a similar approach.

The scheme was complex and had been challenging, resulting in extensive costs to replace sensitive underground infrastructure that had involved lengthy negotiations with third?party interests. This significantly lengthened the construction programme by approximately 22 months in total. Furthermore, a higher number of complex legal matters and challenges resulted in legal costs higher than originally anticipated.

Alternative options considered:

An option not to sell the homes on the private market and instead retain the nine homes for affordable housing purposes had been considered. However, this option was rejected because it would have impacted the viability of the scheme. Any proceeds raised from the sale of the nine homes would be used to cross?subsidise this scheme and other council?home schemes within the housing?delivery programme.

The additional funding for the scheme had been essential work needed to deliver the overall scheme. Not replacing the complex and critical sewer infrastructure servicing the new homes would have risked the entire development going ahead, affecting the overall delivery and construction of the scheme. A build?over agreement was a planning condition that needed to be met; without it, the scheme could not have continued.