Decision details

The purpose of this Decision Notice is to give approval for South Cambridgeshire District Council (SCDC) to enter into Heads of Terms followed thereafter into a JCT Design & Build Contract (JCT 2016 – industry standard) to purchase 9 no affordable homes representing the S106 40% affordable housing contribution on a site at Station Road , Foxton.

The site has been brought forward by Hill who, as an award winning house builder and developer, SCDC have worked in partnership with providing a number of high quality affordable homes in our district.

In its entirety the site totals 22 new homes - with the policy compliant 40% affordable housing of 9 new homes comprising 6 rented homes and 3 shared ownership homes.

Hill are due to start on site in May 2019 and have issued draft Heads of Terms to proceed on. This site forms part of a package of sites put forward by Hill previously and formed part of the HRA Borrowing bid made in September 2018..

All reserved planning matters have been resolved .

It should be noted that the payback is in year 36

This site was one of a number included in Appendix L of the HRA Budget setting report approved by council in November 2018 ( see attached) . It is therefore one of the development sites that are part of the ‘ Unallocated New Build/Acquisition Budget’ included in the New Build Investment Cashflow (Appedix E) of the MTFS approved in February 2019.

Enabling/Strategic support

Strategic Housing fully support this mix, as it will provide much needed homes in Foxton where SCDC has existing stock and where new affordable housing has not been built for some years.

The overall affordable housing mix has previously been agreed by Housing Strategy as meeting the housing needs in Foxton and its environs.

Planning Reference number :

The site has planning (ref: S/2583/18/RM) with all conditions now discharged.

The S106 is signed and completed.

Mix:

Contract type:

The contract will be a JCT 2016 contract. (Joint Contracts Tribunal) Design & Build Contract

Legal Advice : Freeths  ( Previously provided at Grace Crescent , Hardwick)

“We believe that either ownership or an option constitute such “exclusive rights”. It needs to be said, however, that cases do turn on their facts. We would also have to state that the Council should be able to demonstrate that in the case where it was letting a contract including development, that there is no reasonable alternative or substitute – ie there are not other similar convenient sites which could reasonably be regarded as being available for development, eg in terms of being for sale, zoning, access to services etc.

Foxton is a small village which has not had any development sites commenced of this size for some considerable time. There are no other suitably sized permissioned sites in Foxton  that are available for consideration at this time.

Use of Right to Buy Receipt:

This scheme consists of 6 rented homes which allows the use of Right to Buy receipts totalling £346,522

Use of Commuted Sum:

We are using £150,000 of commuted sum monies to assist in bringing these 3 shared ownership homes forward as council new build. This aligns with our standard £50,000 per unit commuted sum spend profile on new build schemes

The scheme is considered to be value for money for the council. The offer and price per sq. m is commensurate with sums paid for recent council new build development schemes. In addition a robust financial appraisal has been carried out and a commercially sensitive financial appendix is attached. The scheme has a Payback year within the business plan parameters.

To approve South Cambridgeshire District Council entering into Heads of Terms followed thereafter by a contract to purchase 9 no affordable homes on a site at Station Road , Foxton

•        This scheme will provide 9 affordable homes - and affordability is a huge issue for the District in terms of housing.

•        These homes will also add additional affordable homes to the Councils housing stock and will be managed by the in house SCDC Leasehold team.

•        The provision of affordable homes is likely to reduce significantly due to recent policy changes for housing providers and the lack of HCA funding available.

•        Changes to housing benefit and welfare reform will also mean that the demand for affordable homes will only increase in this area.

Option 1: Option 1: The Council decides not to enter into contract with Hill for the purchase of the 9 affordable homes on this site.

Reason for Rejection:

• To reject the scheme would require a substitute scheme of similar size and cost to be found in the district to provide new affordable homes. This would be by no means certain and is unlikely to be achieved in the timescales. It would be resource intensive and is unlikely to be possible, with the return of unspent right to buy receipt back to the Treasury with interest if no suitable scheme could be sourced.