Delivery of Affordable Housing - Project 500 Update (Part A)
Report of the Strategic Director (Growth and Development) attached
The Executive considered a report of the Strategic Director (Growth and Development), which provided a progress update on the delivery of affordable homes as part of Project 500 and sought agreement for the disposal of a portfolio of sites in Council ownership for the provision of affordable homes.
The Executive Member for Growth and Housing reported that Project 500 set out to deliver affordable homes on small, non-commercially facing land assets owned by the Council which would be facilitated by seven Registered Providers (RPs). 27 sites had been identified as deliverable as part of Phase 1 of Project 500. This would deliver 378 affordable homes – 89% available for Social Rent or Manchester Living Rent.
Many of the sites were in areas of very high demand for affordable housing – principally North and East Manchester and correlated with areas of intervention identified within the city’s recently published Housing Strategy (2022-2032). The tenure mix across the project had been designed to deliver the optimal outcome to support the Council’s objectives, whilst remaining viable at a portfolio level.
In line with the Council’s obligations to demonstrate and achieve Best Value, an appraisal had been undertaken for each site to consider residual land value. The appraisals had regard to the schemes proposed and was benchmarked against current build costs and values.
The fragmented nature of the sites and challenging development environment had prompted officers to review the proposal to dispose of the sites by way of a long lease. Following long discussions with Manchester Housing Providers Partnership (MHPP) regarding the tenure of the sites to be disposed of and the difficulties expressed by MHPP that would be presented if the disposals were on a long leasehold basis it was considered that the reasons put forward by MHPP represented an overriding reason not to dispose of the sites on a leasehold basis.
The fundamental reasons (amongst others expressed by MHPP) was the change to Homes England funding requirements as well as the recent leasehold legislative changes relevant to long leaseholds for residential premises. In addition, although Shared Ownership structures were exempted from such legislative changes, MHPP anticipated that across the project there would be a large presence of initial shared ownership structure sales to buyers. In view for the potential of such buyers to eventually staircase to 100% and then call on the freehold transfer of their home, MHPP had stipulated that a freehold interest was needed to meet the requirements on final staircasing and the demand to take the freehold by the buyer.
The Council was able to continue to secure their required objectives by way of freehold disposals of the sites rather than by way of long leasehold disposals and so it was proposed to dispose of the sites on a freehold basis. This was also aligned with the revised Homes England position, which required as a minimum a 999-year lease where this was available.
(1) Note the progress to date.
(2) Approve the disposal of the identified land on the principal terms set out in the report.
(3) Authorise and delegate the Strategic Director (Growth and Development) in consultation with the Deputy Chief Executive and City Treasurer to agree and finalise the detailed terms of the transactions.
(4) Authorise the City Solicitor to seek such statutory consents as may be necessary in regard to the disposal of identified land and conclude and complete all documents and agreements necessary to give effect to the terms agreed and the recommendations in this report.
- Delivery of Affordable Housing - Project 500 Update (Part A) FINAL, item 98. PDF 103 KB
- Appendix 1 - List of Sites, item 98. PDF 74 KB
- Appendix 2 - Sites Location Plan, item 98. PDF 759 KB
- Appendix 3 - Housing Strategy Alignment, item 98. PDF 58 KB
- Appendix 4 - Environmental Principles, item 98. PDF 66 KB