Plans to buy 42 homes to be let at ‘genuinely affordable rents’ to those on Thanet council’s housing waiting list are expected to be approved by the authority this week.
The properties are part of the Spitfire Green development off the New Haine Road in Ramsgate and will be bought by Thanet council at a cost of £5million as part of a subsidised deal with housebuilder Barratt Homes.
The properties will be the first of 400 affordable homes that Thanet council has pledged to deliver over the next four years.
The programme will be funded with 60% coming from the council’s Housing Revenue Account and 40% subsidised via developer agreements, Homes England grants or income from Right to Buy sales – of which there were around 15 last year and three expected this year.
Data by Thanet council shows the rent income will show a surplus after year 18. Costs up to that point have been built into the budget through savings from rental income across the authority’s housing portfolio.
Deputy council leader Helen Whitehead, who leads on housing issues, said Thanet’s housing situation has “extraordinary challenges” with 1604 households on the waiting list but many more who are also struggling with affordability and suitability of their homes.
She added: “Rental rates across Thanet are increasing rapidly as are evictions notices Properties that five years ago costs around £600 per month are now routinely marketed for over £1,200.
“Regeneration without infrastructure such as genuinely affordable housing is simply displacement. This should not, and will not, be the future of our community.”
The Spitfire Green properties are made up of 33 x 1 bed flats; four x 2 bed houses; one x 2 bed flat and four x 3 bed flats.
Housing director Bob Porter said: “Single people are the largest single group on the housing register and more than half of the households in temporary accommodation are single people so there is a clear need for one bedroom flats.”
He added that a mix of homes could be created across the four year programme.
Cllr Whitehead said the properties will be either at or just below the Local Housing Allowance rates, adding: “These are in every sense genuinely affordable.”
Currently the LHA rates for Thanet are per month:
Shared accommodation £299.17
1 bedroom £473.72
2 bedrooms £648.22
3 bedrooms £797.81
4 bedrooms £947.40
Cabinet members will discuss the purchase at a meeting on Thursday (July 27).
At the same meeting proposals are expected to be agreed to buy nine homes at Westwood using £1.19million of funding from a national £500 million scheme to enable local authorities to purchase properties for Ukrainian and Afghan refugee households for an initial period of 3 years. Thanet council will match-fund the grant with £1.996million from its housing capital programme.
Spitfire Green homes discount
Barratt Homes has also launched a selection of Discount Market Sale apartments ready to reserve off-plan at Spitfire Green.
The scheme is available at a discounted value of 20% for those who live or work in Thanet, were previously a resident in Thanet and have a close family member who resides in the district, or those who need to live in Thanet to support a family member. Eligible buyers must earn no more than £80,000 per year.
To find out more about Barratt Homes Kent, call 0333 355 8502 or visit www.barratthomes.co.uk
wow!!! need to earn £80 a year to purchase a property at 20% discount, does anyone in Thanet earn that sort of money? Barratts are so generous!!!!!
the flats in the picture are right on a busy roundabout so I hope they will not want to open windows as the fumes and noise will be awful, why these flats were placed so close to the edge of the road I will never know. How many of these properties being built are for pensioners and disabled be interested to know
A maximum of £80k
It clearly says ‘a maximum of £80k’. In other words, applicants could earn a great deal less and qualify. This is what we need, truly-affordable homes not ones that are 80% of the market rent that is now way above many people’s ‘affordable’ level.
Will these be ‘right to buy’ properties? If so it’s a waste of money.
That’s a very good point!
Next government needs to end RTB, like they have in Wales and Scotland!
That’s only 1.92 houses a week over the 4 years.
Not good enough when you look at it
Dear Chris,
Our previous building/acquisition rate was an average of 18 per year.
We are now aiming for over 100 per year.
I very much wish that central government gave sufficient housing and support to social housing for us to be able to create it at larger rates, because, bluntly, we need it; but managing to produce to this scale as a small district council is a huge step forward for those families needing genuinely affordable housing.
All the best,
Helen.
The first home I bought was a studio flat as I could not afford anything else and I happily lived there for over 6 years. So if “Single people are the largest single group on the housing register and more than half of the households in temporary accommodation are single people”, why don’t TDC invest money in a block of studio flats for such singles – the heating for a studio is obviously cheaper than for a one bedroom, especially these days.
So to house 1604 on the waiting list at the moment will take 16 years.All new houses being built in Thanet should be affordable buying or renting to stand a chance of helping people in Thanet get a home
Dear Chris,
TDC is the main provider of social housing in Thanet, but not the only one. Housing Associations also provide social housing, and support families on our waiting list.
All the best,
Helen.
Easy to be cynical but if you are one of the 42 households that will get one of these homes you will be “over the moon”! Of course it’s only a drop in the ocean but it is a step in the right direction. First time for many years we will have more properties at the beginning of the year than we would have had a year ago. A small step but a very welcome one. Worth voting for a change of political control.
Thank you Keith.
It’s a huge step forward moving from an average of 18 properties per year to over 100, especially in an especially challenging funding climate for social housing.
We want to provide as much as possible, and we will do; 400 is our minimum, and we are actively looking to increase our portfolio as much as we can to support residents.
All the best,
Helen.
A good start. Shows it can be done. I assume that most people on the housing waiting list aren’t actually “roofless” but are in overcrowded ,expensive circumstances eg private rents or sharing with relatives. So any of these properties will be a real improvement.
The next stage would be to get a Westminster government that abolishes The Right to Buy, so we can keep possession of publicly-owned places so they can be used for generations to come.
Unfortunately, I can’t think of a major political Party to recommend for this.
Dear Di,
We don’t have control over central legislation, but the strategy supporting this relies on rent, not on capital value, which means that RTB monies can be invested back into purchases and further rental. For context, even in terms of capital impact, we are currently expecting 3 RTB completions this year.
Our last TDC Overview and Scrutiny meeting included a discussion of this; it’s worth a watch if you’re interested in how this strategy will be delivered.
All the best,
Helen.
Then why bother going through all the palava of TDC building a home, installing a family, only to have them buy the place at a huge discount a few years later?
Why not short-circuit the process and simply dish out the discount equivalent to the lucky few as a deposit on their own privately purchased home?
It seems to be a huge waste of public money.
Because the vast majority of tdc’s tenants are workless and/or benefit dependant households and so very few would be in a position to exercise their rightnto buy, as the article states just 3 expected this year.
However the downside of needs based allocation is that you get very unbalanced communities in the “ council estates “ of old. It should be remebered that in the early days of council housing , they were only given to working households that were seen as being certain to afford the rent and look after the properties.
It’s part of the rationale behind the legislation that forces developers to have a % of affordable provision ,
It notionally creates better balanced communities ( all be it rather annoying for those that pay full price to find they have neighbours they would not otherwise have chosen)
The developers are cheaper and quicker than the council at building.
Councils get a cosy deal
Another downside is that it exerts upwards pressure on new homes bought by owner occupiers as they ultimately pay the subsidy for the affordable allocation.
Right to buy was and public theft of well built , spacious properties, often with large gardens .
However new build quality and buildings life span are questioned – maybe maintaining such buildings is not financially viable for local authorities.
Or it could be seen as one of the greatest opportunities for social mobility that those who had the opportunity to buy have ever receieved. It was also thought that tenants being given a real stake/say in the areas in which they lived would improve areas. The large discounts in reality only reflected the true value of a property with a sitting tenant, the gain when sold on being largely the value of the property being then sold with vacant possession.
Much is made of the fact that many rtb properties have subsequently ended up being bought by btl landlords , this relects the lack of desirability such properties have to owner occupiers.
So what is the criteria for getting these homes And how are the people selected? And correct me if I am wrong but if 9 are set aside for refugees that only leaves 33!
The 9 properties for refugees is in addition to the other 42. However, where are TDC going to put these families after the initial 3 year period is up? If you have been given a house to live in that is currently worth on average £354k, you are not going to want to move out of it, just because your 3 years are up.
That is a very good point, and we all know the answer to that one. They will not move or be asked to move and I suspect they will not be paying any rent either!
So TDC are going to buy 42 homes at a subsidised rate of £5m, which is and average of 8.4 homes per £1m. TDC are then going to spend another £2m buying only 9 homes, which works out as an average of 4.5 homes per £1m.
Why are TDC not spending the combined £7m on buying 59 new homes at a discounted rate?
Precisely, no matter what your views are regarding the afghan/ukranian refugees, using local raised money to house locals would for many be seen as money better spent plus it provides homes for a greater number of households and doesn’t bring additional people into the area with the extra pressures on services they use.
Dear blueisthecolour and Lc;
Because the two purchases are coming from different funds, one from central government specifically for Afghan and Ukrainian refugees, and another directly from TDC.
The degree of funding for this specific project means that the rent from those 9 properties will begin to pay for other socially rented homes immediately; there will be no deficit to make up for on these purchases, unlike our purchases for our general portfolio.
The properties themselves are also different; central government required particular properties based on need for the nine properties, and they are bought from the direct market, rather than affordable section 106 properties, which are allocated for residents on our housing list. There can’t be a direct cost comparison here, as they are different properties, using different funds.
All the best,
Helen.
Dear Helen,
Whilst the purchases may be coming from 2 different funds, TDC are still contributing £2m towards the homes for refugees & as well as £5m towards the other 42 homes. That is a total of £7m coming from TDC.
Moving on to your next point, unless the Afghan or Ukrainian refugees are all in employment when they move into the 9 homes, how will they be able to pay rent, thus meaning as you say, “those 9 properties will begin to pay for other socially rented homes immediately”?
Dear blueisthecolour;
You asked why the £7m could not be used to buy entirely general needs housing, and argued that it would be more economical to do so; you did not simply point out that it is £7m of spending.
The £7m cannot be used to buy entirely general needs housing, as £1.99m is match funding for £1.19m of government funding, specifically to provide homes for individuals within the Ukrainian and Afghan resettlement schemes. We could choose not to help individuals fleeing war, and also choose to turn down £1.19m of investment that helps to produce further social housing stock; but I don’t see the logic or the humanity in that.
Individuals who arrive through relocation or resettlement schemes have the same right to employment as anyone born in the UK, and those under eligible relocation and resettlement schemes have recourse to housing benefit if they should need it.
All the best,
Helen.
So the rent on those 9 homes will cover any interest that would be due on 1.996 million of borrowing elsewhere for social housing provision?
On current lHA rates the 9 homes will bring in about 4.6% of the 1.9 odd million tdc are putting into the purchase, by the time you take out management costs at tdc, legal compliance costs etc etc , how can it be claimed that this creates a surplus unless the 2 million has no opportunity cost?
The purchases at Spitfire Green don’t become revenue neutral for a projected 18 years, given that previously it was reported that this was accepted by TDC and that it was to be considered that letting at 80% of market rent should be considered , why was it not considered that a rent somewhere in between was maybe advisable to make revenues better supported. Especially given that these homes are going to be built to modern standards and so cost tenants relativley little in energy costs in comparison to the councils older housing stock. Obviously if LHA rates were to be revised upwards it would make a huge difference to the council’s calculations, but the LHA system is flawed and in itself only forces up rents across the board.
Dear Lc;
The rent on those homes, combined with the funding from central government for this specific fund, will enable that individual project (the nine homes) to be revenue neutral from the point of purchase.
Spitfire Green involves greater borrowing, and lower rents (as the majority are one bed) which means that project does not hit revenue neutrality until year 18, as stated in the Cabinet and Overview and Scrutiny report (there’s a significant amount of detailed information in both of those, and the recorded meetings, if you would like to know more on these projects).
It was not stated that 80% of market rent should automatically be considered; it was stated that it could be considered if market conditions change, or if we choose to increase delivery. Genuine affordability is key here. 80% of market rent for many areas of Thanet is still well above LHA; and although these properties are B rated, we have also had a huge increase in energy costs, that is likely to affect families further over the winter months.
Our priority is to provide genuinely affordable housing. Currently, using the LHA rate is the best way to ensure that rents remain genuinely affordable.
All the best,
Helen.
In the percentage calculation in my previous post i used the current lha rates for 3 and 4 bed homes to arrive at the amount of income the homes would provide, this came to 4.8% on the 2 million tdc are putting into the 9 homes, so the government grant effectively covers the the “deposit” for want of a better term. Or are you saying that these 9 homes will be charged rents at above LHA?
Whilst affordable housing is a laudable goal, where is the funding coming from to subsidise the 42 homes for the first 18 years? If this is to be via the HRA then surely TDC is asking its existing tennants in less efficient homes to subsidise those in brand new efficient homes, if it doesn’t come from the the HRA is it the council tax payer at large that provides the subsidy, in either case i’d suggest subsidising those being allocated brand new homes is going to grate a bit.
In addition given the extent to which the councils properties are occupied by workless/benefit dependent households , would it not make sense to bring all existing council rents upto the level of LHA ? I understand that this is not immediately possible due to restrictions on rent increases as mandated by central government, however are TDC actively lobbying for such a change?
In addition why does TDC not buy ex local authority homes that were previously sold off on rtb that come onto the open market, it would surely return stock of a known quality in preferred locations to council control be a relatively fast and efficient way of adding to council stock.
So there offering a 20% discount . Is that because sales are very slow. I’ve looked around kent and Barrett homes have no character just bland boxes . At least redrow do try to make there’s a little interesting
Why are they buying homes instead of building them. Would it not be cheaper to build there own.
Dear Pam,
We do build our own, and the properties we are purchasing for our general housing portfolio are Section 106 properties, otherwise known as the affordable housing produced by developers. As such they are heavily discounted.
Very best wishes,
Helen.