Issue - meetings

Purchase of Section 106 Affordable Housing Units

Meeting: 27/07/2023 - Cabinet (Item 21)

21 Purchase of 42 Homes at Spitfire Green for Affordable Rent pdf icon PDF 252 KB


Cabinet considered proposals for the purchase of 42 homes at Spitfire Green as part of the Affordable Rent Scheme. These proposals were considered in the context of the accelerated affordable housing development programme of at least 400 new homes, constructed or acquired, by 2027 approved by Full Council on 13 July 2023. To achieve this the council would be using provisions under Section 106 of the Town and Country Planning Act 1990, which provided an opportunity for local planning authorities to negotiate with housing developers for the provision of affordable housing, on qualifying sites. The Council’s local plan policies set out a preference for these requirements to be discharged through the provision of affordable homes within the application site. Delivering genuinely affordable housing as part of any proposed or delivered development in Thanet was essential.


Section 106 agreements require developers to transfer completed homes to an affordable housing provider at a value that makes an affordable rent viable. This meant that the developer effectively provided the necessary subsidy in the form of a discounted purchase price below market value. As markets change, so do delivery models; and increasingly Housing Associations were choosing not to take on smaller numbers of units, which ran the risk of these homes being lost. Failure to secure an affordable housing delivery partner could lead to developers requesting that the S106 agreement be amended to provide a commuted sum in lieu of on-site homes. There was a significant need for more housing in Thanet and for developers to deliver the affordable housing required by residents. A number of developers who had been unable to secure an affordable housing provider partner to purchase section 106 units and deliver affordable homes had approached the Council. Provisions to support the retention of these homes had been incorporated into the Council’s overall strategy.


In respect of the current proposal, Officers were contacted by BDW (Barretts) Homes, who are required to deliver 42 new affordable homes, as part of their development at Spitfire Green, Westwood. This purchase had been assessed against the Council’s detailed viability assessment tool to ensure both financial and strategic viability. It was essential for the viability of the overall HRA programme that only schemes that had a positive impact on the HRA Business Plan were delivered.  To be considered viable, schemes needed to show an overall surplus over a 30 or 50 year timescale, depending on the duration of any borrowing.


A provisional offer of £5m had been made to the developer and subject to contract, legal due diligence, formal valuation and full approval, this offer had been accepted. It is proposed that the new homes are let in accordance with the Council’s adopted allocations policy. It is also proposed that they are let at a genuinely affordable rent, in line with the council’s approved Tenancy Strategy. The Tenancy Strategy defines an affordable rent as a rent that is no more than 80% of the local market rent and does not exceed the relevant Local Housing Allowance  ...  view the full minutes text for item 21

Meeting: 20/07/2023 - Overview & Scrutiny Panel (Item 459)

459 Purchase of 42 Homes at Spitfire Green for Affordable Rent pdf icon PDF 251 KB

Report to follow.


Bob Porter, Director of Place introduced the report Councillor Whitehead, Deputy Leader and Cabinet Member for Housing also made introductory remarks. They made the following points:


  • Council had considered the report on proposals for the development of 400 housing units to be delivered over a period of the next four years;
  • 40% of the funding for this development would come from the housing subsidy Right to Buy receipts or S106 Agreements;
  • The council did not want to compete with housing associations in developing housing in the district but complement them by taking on taking on development that associations considered not viable;
  • There were 1,604 households on the housing register, but the number of those who actually need affordable housing was much higher;
  • Regeneration without affordable housing would cause displacement;
  • The Housing Department had a very good record of delivering. The Council would be using previously unused S106 Agreement funding to deliver 400 units over the next four years;
  • TDC was picking up those housing development projects that were considered small by Housing Association;
  • 60% of the funding for this development would be from HRA borrowing. This was a sustainable and necessary step;
  • Credit should go to the Housing and Finance teams for putting together this proposal.


Members asked questions and made comments as follows:


  • This was an important issue for the district. How many of the households on the housing register were actual families?
  • How much of an impact will this development bring to families in the district;
  • Was the priority of this Council to build on brownfields?
  • Would any of the properties to be built accessible for use by people with disability or the aged?
  • Would solar systems and other energy efficient systems be installed on these properties?
  • Would the new development be built in one location or around several sites across the district?
  • How many houses did the Council lose from its stock to Right to Buy purchases?
  • This was good news. With the continued rise in the cost of living, would the Council be able to adjust year on year to keep affordable housing accessible to deserving persons?
  • Members were proud to support this proposal when it was presented at Full Council on 13 July 2023. Had any study been made on affordable housing in the district?
  • There was a Rise team to support residents who might need support. However, was there a holistic approach to tenancy management?


Mr Porter and Councillor Whitehead responded as follows:


  • Single people were the largest group of individuals on the housing register and half of them were in temporary accommodation;
  • It was always the Council’s priority to build on brown fields;
  • The steer to build on agricultural land was coming from the central government. Although the Council did not agree with that approach, it had to work within the confines of permitted policy;
  • The Council always ensured that all its new development was adaptable for use by individuals with disability or elderly people. The Council promoted a lifetime access to homes  ...  view the full minutes text for item 459