Thanet council is proposing to buy land from Southern Housing at Eaton Place in Margate to provide around 60 council homes in a development which could cost some £12million.
The council aims to deliver the properties for rent on the land where Weymouth House and Stratford House – buildings owned by Southern Housing) -currently sit.
Last November Southern Housing told residents in the two blocks that they had to move out due to structural issues which meant their homes would be demolished.
During construction over a decade ago the original contractor fell into administration and the site was not secured against the elements properly. It was left exposed for too long and the water ingress has damaged the structural integrity of the building.
Of the 78 flats there were 36 in Stratford House rented as social housing. Weymouth House has 42 one and two-bed flats which are market rental properties.
It is understood that eight residents currently remain in the flats.
The council has entered into negotiations to acquire the land for £600,000.
The plan could increase the number of council homes and allow the council to allocate half of the properties to Thanet residents currently living in temporary accommodation, reducing the authority’s spend on nightly-paid accommodation providers and the financial burden to the taxpayer.
A report to councillors sets out the context for the purchase, the considerations that councillors need to make to determine their view on the recommendations and the proposed way forward given some of the complexities surrounding the site.
Due to defects, the buildings will require careful demolition. The council has been assisting Southern Housing with their duty to re-house social housing tenants who would otherwise be displaced. The council will not exchange contracts on the sale until all the properties are vacant.
Cllr Helen Whitehead, Deputy Leader and Cabinet Member for Housing, said: “To deliver what is needed for our residents, creative approaches to delivering housing are necessary; and the crisis residents have faced in relation to the defects in these properties has underlined a need to produce secure, long term housing on this site.
“We have long been supporting residents affected by this situation; but we also need to work to ensure long term affordability in Margate at the same time.
“Knowing the profound need for genuinely affordable housing in Margate, we have been in talks with Southern Housing to ensure that this land is used for genuinely affordable homes, and I am delighted that our discussions have now led to this exceptional opportunity to utilise this brownfield site in the centre of Margate for new properties to support local residents in housing need and in temporary accommodation, and to produce double the previous affordable housing on site.
“Officers have worked incredibly hard to bring this forward, and we look forward to hearing the views of Cabinet colleagues regarding the proposal.”
It is proposed to buy the land for £600,000 from the approved £100m capital programme. The council will contribute towards 50% of the demolition costs, up to a maximum of £300,000 to ensure joint management of the demolition process. Thanet council will also appoint a design team to progress redevelopment designs.
The report to councillors says it is anticipated the cost of delivering a scheme of circa 60 homes would cost just under £12m,
The report to councillors says: “At this stage, the construction costs of any replacement building are not known and so there are no assumptions made about grant funding at this stage.
“For now, the only point to make in terms of risk is that the acquisition would have to be bought through borrowing. If the necessary £900k borrowing was secured at a rate of, for example, 5% that represents £45,000 per annum in interest while the site was being demolished, planned, designed and constructed. This is something for councillors to consider – though work to bring forward a planning application could begin, subject to the capacity of the team, early in 2025,” adding: ” It is anticipated that on basic calculations the cost of delivering a scheme of circa 60 homes would cost just under £12m.
“With a modest assumption on Homes England grant levels this scheme looks viable in financial terms, coupled with the possibility of a
like-for-like replacement of the homes being acceptable in planning terms.”
It is hoped to complete on the sale in December, this will not happen until the remaining tenants have moved to new homes.
The report will be considered first for comment by the Overview and Scrutiny Panel on Tuesday 15 October. The full agenda for this meeting can be viewed on the council’s website.
The acquisition is subject to Cabinet approval and Cabinet will be asked to approve the recommendations when they meet on Thursday 24 October.
