Agenda item

Report of the Director of Property Services and Development

The Cabinet Member considered a report of the Director of Property Services and Development regarding the disposal of land at Deedmore Road required for access to facilitate the delivery of affordable housing.

A corresponding private report detailing confidential financial matters, was also submitted for consideration (Minute 18 below referred).

The Moat House Community Trust (MHCT) owned the freehold of a 1.39-acre site off Deedmore Road which was transferred to them in 2017. 

In March 2022, MHCT secured planning permission for a 100% affordable development scheme consisting of 21 dwellings, with the intention of delivering the housing themselves as part of a Community Housing Trust.  It was binding under the Section 106 agreement that the Land must be developed as rented affordable housing.

Due to increased development risk, particularly regarding the cost of finance and current build cost inflationary pressures, MHCT made the decision to sell off the Land with the benefit of the planning permission.

Terms for a disposal to Keon Homes had been agreed by MHCT.  Keon Homes, in turn, had an agreement with registered provider Citizen Housing to construct the affordable homes on a turnkey basis in return for a contract price.

During legal due diligence undertaken by Keon Homes they identified the land required to access the development site was not owned by MHCT.  The land required for access was owned by the Council.

MHCT had approached the Council to seek agreement for the Council to transfer the Council’s Access Land to Keon Homes so the housing development could be undertaken.

Pursuant to Section 123 of the Local Government Act 1972 the Council was required to obtain best consideration for the disposal of its assets and had taken independent external advice on the value attributable to the land.  MHCT was asking the Council to forgo its capital receipt as this would reduce the MHCT’s receipt for the sale of the Land to Keon Homes. 

MHCT were seeking to use the proceeds of the sale of the Land to support their community activities which would include the further purchases of local residential properties to add to the number of existing houses they could let out as social rented affordable homes. 

The social and economic benefits of promoting the scheme included: 

• Delivery of much needed affordable homes.
• Promotes further regeneration of the area.
• The proposed development would enhance the existing community facilities in the area and encourage further investment in the area.

RESOLVED that the Cabinet Member for Jobs, Regeneration and Climate Change:

1)  Approves the transfer of the Council’s Access Land) which is required to facilitate access for the development of the 100% affordable housing scheme at a nil consideration to Keon Homes upon completion of their purchase of the Land from MHCT, conditional upon the simultaneous onward sale to Citizen Housing.  Such purchase being conditional on the delivery of the Land for the 100% consented affordable homes scheme and MHCT’s future purchase of affordable homes.

2)  Delegates authority to the Director of Property Services & Development, following consultation with the Chief Operating Officer (S151 Officer) and the Chief Legal Officer, to negotiate and finalise the terms, to undertake the necessary due diligence and complete all necessary legal documentation to facilitate the completion of the transaction and to ensure that the financial benefits forgone by the Council are applied to the purchase of property by MHCT and that the said properties are let on social rents.

3)  Delegates authority to the Director of Property Services and Development, following consultation with the Cabinet Member for Jobs, Regeneration and Climate Change and the Cabinet Member for Strategic Finance and Resources, for any subsequent variation in terms.