Stockton-on-Tees Borough Council

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Cabinet Decision: 5th November 2009
Title of Item/Report
Housing Regeneration Response to the Credit Crunch
Record of the Decision
Consideration was given to a report that sought Cabinet approval to introduce an innovative Rent to Buy scheme at Hardwick as part of the Council's strategy to kick start the local housing market.

It was noted that the arrival of the credit crunch and global down turn had inevitably affected the Council's major housing led regeneration schemes at Mandale, Parkfield and Hardwick and a summary of those effects were outlined to members

In response to the impact of the recession and credit crunch, a ‘Rent to Buy' pilot led by the Council has been developed at Hardwick. ‘Rent to Buy' was a relatively new tenure introduced mainly in response to the credit crunch. There are a number of different variations available but it broadly involves the occupier renting a home for 5 years and then purchasing with some of the rent paid converted into a deposit.

The proposal involved prudential borrowing to purchase stock from the developers and allocating the homes on a Rent to Buy basis for local residents applying on the Council's Affordable Homeownership Register.

A number of different options for delivery had been explored:

HRA Reform
Charitable Subsidiary
‘Warehousing Structure'

Due to the level of control provided to the Council and despite not legally owning the properties, the Warehousing Structure option was the preferred delivery model recommended to Cabinet for approval.

The draft Rent to Buy Policy was provided to members and its key features and potential risks were summarised.

Members also received details of financial and legal implications associated with the proposals

RESOLVED that

1. the introduction of a Rent to Buy pilot at Hardwick and delegate approval of the final policy and any subsequent amendments to the Corporate Director of Development and Neighbourhood Services in consultation with the Cabinet Members for Housing and Community Safety and Regeneration and Transport be approved.

2. the ‘Warehousing Structure' be approved as the Rent to Buy delivery model and a Registered Social Landlord partner be procured through the Public Contracts Regulations 2006, Restricted Procedure , with final selection delegated to the Corporate Director of Development and Neighbourhood Services in consultation with the Cabinet Members for Housing and Community Safety and Regeneration and Transport.

RECOMMENDED to Council that approval be given for prudential borrowing, as detailed in the report, to fund the Rent to Buy pilot.
Reasons for the Decision
The economic down turn had had a significant effect on the rate of sales at Hardwick which is a risk to the success of the housing regeneration scheme.
Alternative Options Considered and Rejected
As per report in terms of delivery models
Declared (Cabinet Member) Conflicts of Interest
None
Details of any Dispensations
Not applicable
Date and Time by which Call In must be executed
Not later than Midnight on Friday 13th November 2009 in respect of resolutions 1 and 2
Attachment
  • Report
  • |
    Appendix 1
  • |
    Appendix 2

Date of Publication: 10 November 2009


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