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 7 affordable homes representing the S106 40% affordable housing contribution on a site off High Street, Meldreth.

The site has been brought forward by Enterprise Property Group who, are an award winning developer and that we have previously worked with at the site on Gibson Close, Waterbeach.

In its entirety the site totals 18 new homes - with the policy compliant 40% affordable housing of 4 new rented homes and 3 new shared ownership homes. These are made up of a mixture of 2 and 3 bed houses.

It is the intention that the shared ownership properties are to be sold with a maximum ownership of 80% as per the section 106, with South Cambridgeshire District Council retaining the remaining proportion.

Enterprise are due to start on site in end of January 2021.

All reserved planning matters have been resolved.

It should be noted that the payback is in year 25

This site is 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 2020.

Enabling/Strategic support

Strategic Housing fully support this mix, as it will provide much needed homes in Meldreth where SCDC has existing stock .

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

Scheme Details:

Planning Reference number :

The site has planning (ref: S/1124/17/OL) with all conditions now discharged.

The S106 is signed and completed.

Mix:

Contract type:

The contract is likely to 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.

There are no other suitably sized permissioned sites in Meldreth that are available for consideration at this time.

Financial

Use of Right to Buy Receipt:

This scheme consists of 4 rented homes which allows the use of Right to Buy receipts totalling £305,010

Use of Commuted Sum:

This scheme consists of 3 shared ownership homes which allows the use of commuted sum totalling £150,000

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 to enter into Heads of Terms followed thereafter by a JCT contract for the build of the 7 affordable homes and a land contract and transfer to purchase the site for the 7 affordable homes at High Street, Meldreth.

• To approve to grant shared ownership leases up to a max 80% for the shared ownership properties.

• This scheme will provide 7 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 Enterprise Property Group for the purchase of the 7 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.