Agenda item

To provide an update on the council’s New Homes & Regeneration Programme, setting out the key challenges to delivering the remainder of the sites.

To present to members a Financial, Social and Corporate Viability Scheme Matrix which will provide a standardised method for appraising future sites and opportunities.

To detail the proposed funding plan and several rental charge options which may help to support delivery of the schemes. 

To seek authority to remove the Orchard Road, Ebley site from the programme and review the options for future use of the site.

The New Homes and Regeneration Manager introduced the report and drew the Committees attention to the following key points:

• Construction costs, materials cost and the cost of borrowing had all increased considerably. During the past 9 months, 3 cost reviews had been undertaken to understand and monitor movement within the housing  construction market which showed an increase of 40% and 60%. The cost increase had resulted in an additional £5.4m required to deliver the programme.
• The site at Orchard Road, Ebley was recommended to be removed from the programme and was not included in the revised costings. The recommendation to remove the site was subject to a review, the results of which would be brought back to Housing Committee.
• Should a future decision approve the sale of the Orchard Road site, the Capital Receipt would be re-invested into the New Homes Programme. 
• The New Homes and Regeneration Programme was not funded by rental income from existing properties, a proposed funding plan could be found in Table 4 on page 19 of the reports pack.
• There were a few rental options available for the New Build properties. These were detailed in section 4.6 of the report. It was recommended to charge the full 80% market rent where necessary to fund sites.

The New Homes and Regeneration Manager gave the following answers to questions:

• There was no specific modelling completed to date to justify the increase in rent for higher energy performance however, they had reached out to tenants to request that they shared their usage data in order to model the saving opportunity to future tenants. 
• The typical lifespan of a new house would be in excess of 60 years, if well-built and well maintained.
• The council had recently made contact with a modular housing suppliers in order to explore other options and construction types.

In response to Councillor Hoskin, the Accountancy Manger confirmed that the local housing allowance was not linked to market rents and also spanned an area of Gloucester which meant that it didn’t always cover Stroud District rental prices. However, the 80% of market rent was not calculated each year, therefore if rental prices changed drastically, tenants rent would only increase in line with social rents. When the property was re-let, the 80% of market rent would then be recalculated.

Councillor Miles asked for a summary of the position of the Orchard Road site. The New Homes and Regeneration Manager explained that the site had planning permission for 5 affordable homes. It was recommended for removal due to the cost of developing the site. The cost had increased by over 100% since the original estimate which made it no longer viable to develop.

Councillor Baker proposed and Councillor Jockel seconded.

Councillor Miles expressed her support that the Council were looking at other options to support affordable housing on the Orchard Road site. She also expressed disappointment that there were no bungalows included in the upcoming builds and whether they could be included in the future.

Councillors Baker, Schoemaker, Hynd and Jockel commended the report.

After being put to a vote, the Motion was carried unanimously.

RESOLVED To:

a)  note the position of the current New Homes & Regeneration Programme.

b)  approve the removal of the Orchard Road site in Ebley from the New Homes & Regeneration Programme, subject to a report back to Committee on options for the future use of the site to support affordable housing.

c)  delegate authority to the Head of Property Services in consultation with the Accountancy Manager and the Chair and Vice Chair of Housing Committee to charge a mixture of either social rents, affordable rents capped at LHA, or affordable rents at the full 80% of market rent to maximise the funding available to the programme and assist with the long-term viability of particular sites and