Thanet council is expected to approve the purchase 137 properties which will be let to people on the isle’s housing waiting list and those moving on from temporary accommodation.
The cost of the homes, on the Spitfire Green Phase 3 site being constructed by BDW (Barret David Wilson) on New Haine Road, Ramsgate, is £38,150,000 plus £75k for legal costs.
A previous agreement to buy 32 homes at the same site will not go ahead and those will be taken on by a registered provider (housing association) as shared ownership properties.
In July 2023, Thanet council approved an accelerated affordable housing development programme for at least 400 new homes, constructed or bought by 2027, to be added to the authority’s housing stock.
Some properties have been bought through section 106 agreements – where developers are required to provide affordable homes on sites of 10 properties or more – but the latest property deal is independent of that.
Council ‘quest to deliver homes’
A report to council Cabinet members says: “As councillors will recall, previously, the council has primarily acquired s106 homes where registered providers (RPs, formerly known as housing associations) have latterly refrained from bidding.
“This has led to officers being contacted by a number of developers (of varying sizes) who have been unable to secure an affordable housing provider partner to purchase s106 homes.
“This failure (described widely now as market failure) to secure an affordable housing delivery partner can lead to developers requesting that the s106 agreement be amended to provide a commuted sum in lieu of on site provision.
“This context is important because Thanet’s willingness to ‘step in’ and secure those homes has put the council’s name out there for wider opportunities, such as the one presented here.
“In this case, the council is proactively looking for the opportunity to acquire homes as it is strongly felt that securing a robust pipeline of homes is one way in which the council can, through local lettings plans, reduce its reliance on the expensive use of nightly-paid temporary accommodation.
“In the council’s quest to deliver homes in greater numbers to alleviate the pressure on the housing register and the households currently in temporary accommodation, officers have reached out to a number of developers to see if there is any opportunity to acquire homes that might otherwise have been sold on the open market.
“This is an ambitious move, which shows the council is listening to concerns of residents on the housing register or in temporary accommodation, who have recently commented on how many homes are being built in the district (due to the buoyant housing market in Thanet) but that few seem to be available for them.”
The cost for the properties will be funded through £11.645m Homes England and £26.580m of borrowing. No stamp duty has been assumed due to grant funding subsidising the acquisition.
Council homes target
Of the council’s 400 home target a programme of 207 homes has been approved. These include 49 new builds at Dane Valley and Tomlin Drive in Margate and Staner Court and Clements Road in Ramsgate, section 106 acquisitions and 34 open market deals. Of these, 173 homes are fully funded without Homes England funding.
The latest proposed purchase would generate a cash deficit in year 1 of £166k with surpluses accumulating from year 8.
Thanet’s housing register
According to the report to councillors, the housing register shows 724 households requiring a 1-bedroom home, 232 households having a requirement for a 2-bedroom property and 336 households requiring a 3-bedroom property. A further 107 households require a 4-bedroom home and some households need more than that.
The new council homes will be let 50% to priority applicants from the council’s Housing Register and 50% to people moving out of temporary accommodation. Rents will not exceed the Local Housing Allowance rates.
The report says: “The latter is important as this will reduce the temporary accommodation bill for the council and the taxpayer, as well as reducing the social toll on those in temporary placements.”
At the end of 2023/24 the council’s net spending (after grant) on temporary accommodation services was £2.5m.
Further temporary accommodation
Cabinet members are also expected to agree to buy a further 11 properties at Westwood Point from developer Vistry to be used for temporary accommodation.
The latest buys would be four 2-bedroom properties and seven 3-bedroom properties costing £2.85m – equating to £259,090 per dwelling – plus £132,000 Stamp Duty and £22,000 legal costs.
Officers say there would be a cash flow deficit in year 1 of £1,832 with surpluses accumulating from year 2.
Of those in temporary accommodation 169 households currently have a one-bedroom need, 60 households in temporary accommodation have a need for two-bedrooms and 50 households have a need for three bedrooms.
Thanet council agreed in August to purchase six temporary accommodation flats in Margate Road, Ramsgate, from local developer GPML construction, adding to in-house temporary accommodation sites at Foy House in Margate and the former Glendevon hotel in Ramsgate.
The latest purchases will be discussed at a council meeting on September 26.
Council deputy leader Helen Whitehead, who has responsibility for housing, said: “We promised to deliver 400 homes by the end of our first term, and we are making excellent progress towards that target; ensuring that genuinely affordable properties are not lost is essential, and expanding our housing delivery beyond that means that more families can move into desperately needed homes faster.
“Some of these acquisitions will take time; and so it is equally essential that we expand our in house temporary accommodation as fast as possible, to ensure that residents stay near to their jobs, schools and networks; including the newest proposal, we will have expanded our in house temporary accommodation significantly since May, with the acquisition of properties in Margate, Broadstairs and Ramsgate, to provide support across Thanet.
“Housing are doing an incredible job to ensure that we deliver what is needed, and are providing security and support for residents in doing so.”
