Decision details

Date of Decision:

31/01/23

Title:

Portland House, Wellgate Place Change of Tenure

Decision Maker:

(Including Job Title)

James Clark, Assistant Director of Housing

Details of Specific Cabinet Delegation

or Delegation contained in the relevant Sub-Scheme of Delegation.

On 21 October 2019, Cabinet approved the development of 171 new homes across three town centre sites, including 20 homes for Shared Ownership at the site of the former Henley’s garage (now known as Wellgate Place).

Cabinet authorised “the Assistant Director of Housing in consultation with the Cabinet Member for Housing to make amendments to site boundaries and to the numbers, types and tenures of homes in the scheme.”

Decision:

The decision is that 11 shared ownership apartments on the scheme should be converted to affordable rent. The revised tenure would changed be as follows:

Reasons for the Decision:

The 11 shared ownership apartments at Portland House, Wellgate Place remain empty since handover in May 2022. Whilst the homes remain empty the Council continue to incur costs.

Shared ownership, was a key part of the Shared Ownership and Affordable Homes Programme 2016-21 (SOAHP), with the original prospectus setting out that grant funding bids would be expected to deliver circa 88% shared ownership.

This shared ownership expectation was later reduced by Homes England (the Homes and Communities Agency at that time) subsequently allowing general needs rented accommodation to be included, though the requirement for shared ownership was still substantial.

As grant funding support was essential in helping to address the viability of the overall programme, a shared ownership provision had to form a part of the Council’s build activity

Shared ownership however was not a significant part of the Rotherham housing market at that time and in being an early adopter, the Council effectively took on a market making role in delivering this tenure at reasonable scale into areas where shared ownership had little existing presence.

Learning from the delivery of the town centre programme has established that the market has reacted well to shared ownership houses, but not to shared ownership apartments.

The likelihood is that the combination of a mortgage requirement, payment of rent on the unowned share in addition to service charges on apartments may be too much for the market to bear in what is still a borough of relatively depressed market values. This is also reflected in other S/O schemes across the borough. Shared ownership houses generally have no, or minimal service charge obligations.

Details of alternative options considered and rejected:

The option of service charge reductions and incentivising sales has been dismissed, as the interest overall has been limited, it would require additional resources, and would be a further financial loss to the Council, with no guarantee of sales.

Several alternative tenure options were considered but as the property must remain as an affordable housing product to retain grant, a change to affordable rent offers the most expedient option in terms of governance and mobilisation, to reduce any further losses. 

Conflicts of interest declared by any Cabinet Member consulted by the decision maker which relates to the decision:

No conflicts of interest declared

Dispensations Granted:

(If any)

N/A

Reports or parts of reports considered

Report to Cabinet, 21 October 2019: Delivering town centre housing on Council sites.