Agenda item

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 rate. As a Registered Social Landlord the council was required to consult with Homes England and the Regulator for Social Housing about its rent policy; the aim was always to ensure that rents were as affordable as possible.

This was a genuinely progressive housing model, that allowed Housing to work to produce more housing for Thanet, as part of a strategy that protected affordable housing and ensured full delivery of all affordable homes produced. Both Housing and Finance departments had worked tirelessly to deliver this strategy, and Cabinet was hugely proud of their efforts.

Councillor Garner and Councillor Bayford spoke under Council Procedure 20.1.

Councillor Whitehead proposed, Councillor Yates seconded and Cabinet agreed:

1. The purchase of 42 new affordable homes, using the additional capital budget, approved by council at its meeting on 13 July 2023;

2. The letting of these homes in accordance with the council’s Allocations Policy, at an affordable rent as set out in the council’s Tenancy Strategy.