Decision details

Report presented to Finance and Performance Board to purchase a development of 5 properties at Houldsworth Drive as the acquisition was above the value thresholds in the Acquisitions Policy

Finance and Performance Board approved for the Housing Service to purchase a development of five new build two bedroom properties at Houldsworth Drive, Hady. The purchase will be split into the purchase of a pair of semi-detached properties for £240,000 in the financial year 2019/20 and an option to take up the purchase of a further 3 properties for £345,000 during financial year 2020/21.

3.0Background
3.1An offer has been made to for the development of five two bedroom houses at Houldsworth Drive, Hady to Frank Innes the estate agent acting on behalf of the developer. The bungalow to the side of the development is intended to be occupied by the developer.
3.2The developer was seeking £130,000 for the first two properties (the pair of semi-detached properties at the front) and either £120,000 or £125,000 for three properties at the rear.
3.3The site is currently under construction with the first two properties due to be completed in late October or early November 2019. The three town houses to the rear are not yet under construction. Their construction will begin once the two semi-detached properties are sold. The developer is anticipating their completion by August 2020.
3.4An offer of £585,000 for the five houses was made to and accepted by the developer. The offer was made up of £120,000 for the two semi-detached properties and £115,000 for each of the row of three town houses to the rear. Kier are instructed to draw up and negotiate the Heads of Terms documents for the purchase once Finance and Performance Board approve the purchase.
3.5The price agreed is over the limits within the current Strategic Acquisitions Policy as set out below:
•The owner has a large service charge/ major works debt they are unable to afford (Leasehold property only)
•The maximum price payable for a property will not exceed £90,000 (to increase by inflation (now approximately £96,000))
•That the value of property purchase and works required to bring the property up to a lettable standard does not exceed £95,000.
•If the property being considered does not meet one of these criteria, a report to Cabinet will be required to secure approval for the spend
3.6Finance and Performance Board therefore gave permission for the acquisition under the delegation:
Finance and Performance Board and Land Disposal Group
OFFICER DELEGATIONS: To the Chief Executive, an Executive Director or the Director of Finance and Resources:
G275D Notwithstanding any other delegations in Part 3, after consultation with members of the Finance and Performance Board to approve the acquisition and disposal of land of a value of up to or exceeding £250,000.

Alongside this report a new Acquisition Policy was considered. The purchase of the three properties to the rear will be considered under this revised policy and a further officer decision submitted.

Recommendation to show that the purchase of 2 properties is £240k (within delegation) and the option to purchase the other 3 will be after the new policy and will require Cabinet member approval

Option 1 - To purchase the 2 properties at Houldsworth Drive for £240,000 and take an option for the other three properties
Option 2 - To not purchase the two properties