Agenda item

One public question has been received.

The following response was provided to the question received from Mr Gary Dawson:

Public Question to the Cabinet Member for Finance (Cllr John Rawson) from Mr Gary Dawson:

What is Cheltenham Borough Council’s policy in relation to its own long term vacant domestic property, and why has no reference been made within the Housing Renewal Policy 2012 - 2017 with regard to this policy? 

Response from Cllr Rawson:

The Council’s policy regarding its own long-term vacant domestic property is not mentioned in the Housing Renewal Policy 2012-17 because that document is concerned specifically with private sector housing.

Cheltenham Borough Council (CBC) and Cheltenham Borough Homes (CBH) have a policy of making the most effective use of their housing stock, which naturally means filling properties with new tenants as quickly as possible when they become vacant.  In average it takes 17 days between one tenant leaving and another moving in, which is one of the fastest turnarounds of any social landlord in the country.

However there will occasionally be properties that are deliberately being held empty pending redevelopment.  There will also sometimes be properties that are no longer economic for CBC to retain, as it will be too expensive to bring them back to an acceptable condition.  In this case CBC will review the future of these properties and usually put them on the market to get the best return for the asset. 

There are currently seven properties in this latter category which have been held for a very specific and carefully considered reason.  In past years, when councils disposed of Housing Revenue Account properties to people who wanted to live in the properties rather than rent them out, the council was allowed to retain only 25 per cent of the capital receipt for reinvestment. 

To get round this restriction, CBC tried to sell the properties to buy-to-let investors.  However in the economic downturn either the offers were not acceptable or there was no interest.  We therefore decided to follow an alternative course of action.

Some time ago, the Government announced that it intended to change the rules to allow councils to retain a higher percentage.  In these circumstances, CBC felt that if it wise to wait for this change in the law, so that it would have more of the proceeds of sale to reinvest.

The change has taken longer than expected to come, and in fact the Government did not introduce it until April this year.  However, our legal team have looked into the implications of the change, and have confirmed that we will be able to retain 100% of the proceeds of sale when selling HRA properties to owner-occupiers, provided we reinvest the money in affordable housing.  This is a very welcome turn of events which is worth many thousands of pounds to us and I believe it justifies the delay.

 In the new, changed circumstances, I have asked officers to review the future of these properties and report back to me.  Regardless of the change in the law, CBC is still under an obligation to obtain “best consideration” for any asset it disposes of, which means I will need to take professional advice from officers about the best way of marketing the properties and the best time to do so.