Update on Open Market Purchase Scheme PO13(2)
North Lanarkshire Council · 15 February 2023
Back to Housing Committee — 15 February 2023 and its agenda
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North Lanarkshire Council Report Housing Committee Does this report require to be approved? ☐ Yes ☒ No Ref PH/FD Date 15/02/23 Update on Open Market Purchase Scheme Programme of Work P013(2) From Pamela Humphries, Chief Officer of Place E-mail dicksonf@northlan.gov.uk Telephone Fiona Dickson, Project Development Officer 07581 034 779 1. Background 1.1 The purpose of this report is to provide an update on the progress of the Open Market Purchase Scheme which is an extension of the Empty Homes Purchase Scheme. The Open Market Purchase Scheme is helping to increase the supply of housing to meet housing need as part of the Council’s new supply programme. 1.2 In 2013 the Council established a scheme to purchase empty homes which was particularly targeted at long term empty properties, particularly those that were falling into disrepair or blighting the local communities. Since inception, the Empty Homes Purchase Scheme has brought 317 empty properties back into use at an average cost of £70,938. Executive Summary The purpose of this report is to provide an update on the progress of the Open Market Purchase Scheme (OMPS). The OMPS enables acquisition of private sector properties that are for sale, and predominately are former public sector stock. Recommendations It is recommended that the Committee: 1) Note the contents of the report and the continued success of the Open Market Purchase Scheme in helping increase housing supply and improve stock condition. 2) Note that a further update will be provided to committee in 6 months The Plan for North Lanarkshire Priority Improve the health and wellbeing of our communities Ambition statement (1) Ensure a housing mix that supports social inclusion and economic growth
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1.3 In addition to the Empty Homes Purchase Scheme the Enterprise and Housing Committee approved the development and implementation of an Open Market Purchase Scheme on 15th February 2018 and set a target of acquiring 100 properties per annum. In 2018/19 this target was exceeded, and 130 homes were purchased in total. In 2019/20 this number was also exceeded, and 143 properties were purchased in total, and in 2020/21 106 properties were purchased, despite the challenges posed by the Covid pandemic. An ambitious target of 130 properties was set for 2021/22 however due to the competitive market the final figure purchased for 2021/22 was 75 properties. This was mainly due to the buoyancy of the current housing market where homeowners in this sector were able to sell their homes quickly and were being offered more than the value of the Home Report. 1.4 In November 2021, the Housing & Regeneration Committee approved the expansion of the OMPS which now allows us to acquire homes that would enable common works to progress in priority blocks and allow the only remaining owner occupier to remain in their properties as a social tenant. 1.5 In August 2022, the Housing & Regeneration Committee approved the expansion of the OMPS to now consider buying homes from private landlords and allowing the tenant to remain in the home as a council tenant to help prevent homelessness and increase the council’s housing stock. 2. Report 2.1 The Open Market Purchase Scheme has proved to be very popular with over 2545 enquiries/applications. In addition to enquiries/applications, staff proactively engage with sellers and Estate Agents within all areas of North Lanarkshire. This allows targeted identification of potential properties to acquire where identified demand exists or to support and enable progression of common works in mixed tenure blocks. In 2022/23, 44 properties have been purchased as at 6th January 2023, with a further 31 at conveyancing stage. The locations of the properties purchased are outlined below: 2021/22 2022/23 Area Number of Properties Area Number of Properties Airdrie 25 Airdrie 12 Bellshill 2 Bellshill 1 Coatbridge 9 Coatbridge 7 Cumbernauld 6 Cumbernauld 2 Kilsyth 3 Kilsyth 2 Moodiesburn 1 Moodiesburn 2 Motherwell 16 Motherwell 9 Shotts 3 Shotts 1 Viewpark 4 Viewpark 0 Wishaw 6 Wishaw 8 Total 75 Total 44
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2.2 Apartment size by areas - 2 Apartment - 1 bedroom 3 Apartment - 2 bedroom 4 Apartment - 3 bedroom 5 Apartment - 4 bedroom Airdrie 2021/22 2 14 8 1 2022/23 2 8 2 0 Bellshill 2021/22 0 0 2 0 2022/23 0 1 0 0 Coatbridge 2021/22 1 6 2 0 2022/23 2 4 1 0 Cumbernauld 2021/22 0 2 3 1 2022/23 2 0 0 0 Kilsyth 2021/22 0 0 1 2 2022/23 0 1 1 0 Moodiesburn 2021/22 0 1 0 0 2022/23 0 2 0 0 Motherwell 2021/22 4 7 5 0 2022/23 0 6 3 0 Shotts 2021/22 0 0 0 0 2022/23 0 1 0 0 Viewpark 2021/22 1 1 2 0 2022/23 0 0 0 0 Wishaw 2021/22 0 4 2 0 2022/23 1 6 0 0 2.3 Of the properties purchased in 2022/23, 32 are categorised as having been long term empty properties, and 12 were purchased through the Open Market Purchase Scheme, although in effect the two schemes have now been merged into one. All the properties purchased are former council or Development Corporation properties. 2.4 The number of applicants for the programme have been lower so far this year compared to other years and more in line with 2021/22. At the end of Quarter 3, 43 properties have been purchased, which compares to 52 homes purchased at the end of Quarter 3 in 2021/22. Extrapolating the figure to the end of the year it would seem
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likely that this year approximately 60 homes will be purchased. This is directly linked to the heated housing market at present where homeowners in this sector of the market are able to sell their homes quickly in the open market at the moment. 2.5 Recent extensions to the Open Market Purchase Scheme have increased the opportunities for acquiring properties within different sections of the market. As such, promotional activities have been carried out throughout Q2 and Q3 of 2022/23 to increase awareness and appropriately advertise to owners and Landlords. These activities have included but are not limited to, an ongoing social media campaign; 1,043 letters being sent to all the sole private owners in blocks of flats, where all other flats are owned by the council and 1000 leaflets printed for drop off in public areas. A total of 91 applications have been received via these extended routes, with 62 applications at initial approval stages and 2 applications having progressed to the Legal stage. 2.6 There were six owners within the first phase of the re-provisioning programme who required to be bought out, and engagement with these owners has been progressing. Five owners have now sold their properties to the council, and a compulsory purchase order is now being progressed to purchase the home of the remaining owner. In addition, there are five owners in the remaining multi storey flats, all in Motherwell. The Committee previously agreed that the council should seek to purchase these flats and allow owner occupiers to remain as council tenants, should they wish. To date three flats have been purchased and discussions are progressing with the other owners regarding the potential for the council to buy back their flats as soon as possible. 3. Measures of success 3.1 The acquisition of these properties helps the Council meet its Local Housing Strategy objectives to increase housing supply to meet identified need; help bring empty properties back into use, and help improve housing conditions, including energy efficiency. 4. Supporting documentation No appendices Pamela Humphries Chief Officer of Place
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5. Impacts ( http://connect/report-template-guidance ) 5.1 Public Sector Equality Duty and Fairer Scotland Duty Does the report contain information that has an impact as a result of the Public Sector Equality Duty and/or Fairer Scotland Duty? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? If Yes, has an assessment been carried out and published on the council’s website? https://www.northlanarkshire.gov.uk/your-community/equalities/equality- and-fairer-scotland-duty-impact-assessments Yes ☐ No ☐ 5.2 Financial impact Does the report contain any financial impacts? Yes ☒ No ☐ If Yes, have all relevant financial impacts have been discussed and agreed with Finance? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? A budget of £10.55m has been allocated in 2022/23 to fund the purchase and repair of properties through the Empty Homes Purchase Scheme and the Open Market Purchase Scheme which includes an estimated contribution of £1.5m from the Scottish Government. As at 6th January 2023, £3,850,816 has been spent on acquisition and repair, and £3,289,324 has been committed. The average purchase price of the properties acquired in 2022/23 is £79,130 and average repairs cost is £11,621. Agreement has been reached with the Scottish Government to apply a sliding scale for buy back funding, based on property value as follows: • £35k grant per unit, for homes up to an £80k purchase price • £40k grant per unit, for homes with an £80-£90k purchase price • £45k grant per unit, for homes with a £90-£100k purchase price • £50k grant per unit, for homes with a purchase price above £100k Previously, any buy back purchases were eligible for a maximum grant contribution of £30k per unit. The new scale is applicable to any buy back grant claimed from 6 December 2022. Funding to acquire properties from owners in the towers/ Phase 1 re-provisioning will be contained within the overall OMPS budget. Funding for the proposed extension of the Open Market Purchase Scheme will be met from the HRA as part of the budget provision for the New Supply Programme. 5.3 HR policy impact Does the report contain any HR policy or procedure impacts? Yes ☐ No ☒ If Yes, have all relevant HR impacts have been discussed and agreed with People Resources? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact?
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5.4 Legal impact Does the report contain any legal impacts (such as general legal matters, statutory considerations (including employment law considerations), or new legislation)? Yes ☐ No ☒ If Yes, have all relevant legal impacts have been discussed and agreed with Legal and Democratic? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 5.5 Data protection impact Does the report / project / practice contain or involve the processing of personal data? Yes ☒ No ☐ If Yes, is the processing of this personal data likely to result in a high risk to the data subject? Yes ☐ No ☒ If Yes, has a Data Protection Impact Assessment (DPIA) been carried out and e- mailed to dataprotection@northlan.gov.uk Yes ☐ No ☐ 5.6 Technology / Digital impact Does the report contain information that has an impact on either technology, digital transformation, service redesign / business change processes, data management, or connectivity / broadband / Wi-Fi? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? Where the impact identifies a requirement for significant technology change, has an assessment been carried out (or is scheduled to be carried out) by the Enterprise Architecture Governance Group (EAGG)? Yes ☐ No ☐ 5.7 Environmental / Carbon impact Does the report / project / practice contain information that has an impact on any environmental or carbon matters? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? The properties purchased will be brought up to the Scottish Housing Quality Standard, which may improve their thermal efficiency and help reduce carbon emissions. 5.8 Communications impact Does the report contain any information that has an impact on the council’s communications activities? Yes ☐ No ☒ If Yes, please provide a brief summary of the impact? 5.9 Risk impact Is there a risk impact? Yes ☒ No ☐ If Yes, please provide a brief summary of the key risks and potential impacts, highlighting where the risk(s) are assessed and recorded (e.g. Corporate or Service or Project Risk Registers), and how they are managed?
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The expansion of the OMPS to enable certain tenants of private landlords to become North Lanarkshire Council tenants following the purchase of their may result in increased demand from other landlords who want to be provided with this option. There will therefore be clear criteria set out regarding the eligibility criteria. 5.10 Armed Forces Covenant Duty Does the report require to take due regard of the Armed Forces Covenant Duty (i.e. does it relate to healthcare, housing, or education services for in-Service or ex- Service personnel, or their families, or widow(er)s)? Yes ☐ No ☒ If Yes, please provide a brief summary of the provision which has been made to ensure there has been appropriate consideration of the particular needs of the Armed Forces community to make sure that they do not face disadvantage compared to other citizens in the provision of public services.