Issue details

Introduction
The Council has an opportunity to purchase a development of seven properties. Four x3-bedroom houses and three x 1-bedroom houses.
The properties are located on the site of a former bakery on New Hall Road/ Old Hall Road at Brampton. The development has full planning permission and all pre-commencement planning conditions are discharged.
Discussions with the developer have been positive and an agreement on the total cost of the seven properties £1.460m has been made. The three-bedroom houses will cost £260,000 each and the one-bedroom properties will cost £140,000 each.
The valuations have been confirmed by the Council's disposals surveyor.
The development is cost effective when priced within the acquisition’s calculator charging a 105% social rent under the Government social rent policy.
The approximate date for completion is between April – June 2023
Considerations
Purchasing the seven properties will help the Council achieve the Council Plan target to deliver 100 new affordable homes by 2023.
The allocations team were satisfied that the development would meet identified housing needs. Three-bedroom family properties are in high demand. One-bedroom houses are in limited supply and will encourage downsizing from larger properties.
The developer is happy to install the kitchens, bathrooms, boilers etc to CBC specification to ensure ease of future maintenance.
Financing the purchase of the development
The cost of acquiring the properties is £1,460,000 plus an estimated 5% Stamp Duty for an estimated total of £1,533,000. The developer has agreed to fix the price in a contract.
The development would be secured through paying a 10% deposit (£146,000) and the remaining 90% (£1,314,000) on completion.
The purchase would be financed through the strategic acquisitions budget in the capital programme. The budget for 2022/23 is £2.5m. Commitments of £2.1 m have been already in 2022/23 leaving around £400,000. A 10% deposit (£146,000) would be payable on exchange of contracts. As the anticipated completion date is April – June 2023 the remainder of the cost will be met from the 2023/24 acquisitions budget and roll over of the unspent 2022/23 budget. If the properties complete earlier then monies will be allocated from other areas of the capital programme.