Agenda item

Report of Senior Head of Community.

Cabinet lead member:  Councillor Alan Shuttleworth.

(1) That the council makes a loan facility available of up to £5m on market terms to Eastbourne Housing Investment Company Ltd (EHICL) for the purpose of enabling the company to purchase residential accommodation.

(2) Senior head of community, in consultation with lead cabinet members for community and finance, granted delegated authority to agree the whole scheme lending parameters for purchases, to include types of property and financial viability.

18.1 Cabinet considered the report of the senior head of community.  In October 2014 Cabinet had approved the establishment of a new asset holding company (trading as Eastbourne Housing Investment Company Ltd (EHICL)) to help maintain progress on housing and economic development.  In approving the establishment of the company, cabinet noted that this would create capacity to hold some of the council’s property portfolio in a separate vehicle and thereby differentiate between its general needs stock and other forms of housing and tenures. 

18.2 The report sought approval for a loan facility up to £5m for EHICL to purchase residential properties on the open market and council homes sold as part of the future high value assets disposal programme being introduced under the Housing and Planning Act.  This would allow the purchase of some 30 to 40 properties.

18.3 The council had a statutory duty to provide advice and assistance to households in housing need.  The report highlighted a number of factors which had led to this proposal to purchase of suitable residential properties by EHICL for rental:

·         Over the past year the demand for accommodation had increased and placements in temporary accommodation had risen. 

·         Social housing (council housing managed by Eastbourne Homes Ltd and housing managed by registered providers) was under significant pressure and locally the number of homes becoming vacant had reduced. 

·         Securing private rented accommodation was becoming significantly more difficult, particularly for those on benefits. 

·         Recent changes to benefit regulation meant that the council was unable to recover all of the costs of arranging accommodation for households that were placed in emergency accommodation.

18.4 Housing provided by EHICL would also assist the council meet its wider economic and regeneration aims by ensuring that accommodation was kept in good condition.  In addition, in certain circumstances it might support the purchase of accommodation in areas of deprivation or decline requiring investment through cross subsidy within the wider company property portfolio.

18.5 The financial viability of each prospective acquisition would be assessed as a stand-alone project and continuous monitoring of demand for housing need would be undertaken to mitigate voids and/or capital losses.  The report set out key risks and factors to mitigate those risks and the legal basis under which the acquisitions and loans could be made.

18.6 Resolved (key decision): (1) That the council makes a loan facility available of up to £5m on market terms to Eastbourne Housing Investment Company Ltd (EHICL) for the purpose of enabling the company to purchase residential accommodation.

(2) That the senior head of community, in consultation with the lead cabinet members for community and finance, be granted delegated authority to agree the whole scheme lending parameters for purchases, to include types of property and financial viability.

(Notes: (1) Councillors Tutt and Shuttleworth both declared personal interests in relation to the above minute.  See minute 12 above.)

(2) Councillor Mattock took the chair for this item.

(3) Ian Fitzpatrick, senior head of community (and managing director of Eastbourne Homes Ltd.), advised members that he was a board member of EHICL.)