Open Market Purchase Scheme - Programme of Work PO13 (2)
North Lanarkshire Council · 31 August 2022
Back to Housing Committee — 31 August 2022 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 31/08/22 Open Market Purchase Scheme Programme of Work P013(2) From Pamela Humphries, Head of Planning and Regeneration E-mail dicksonf@northlan.gov.uk Telephone Fiona Dickson, Development Officer 07581 034 779 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. The report also seeks approval for a further extension to the scheme to acquire homes from private landlords in certain circumstances, to help prevent homelessness and enable private tenants to remain in their home as a Council tenant. The acquisition of these properties increases housing supply to meet housing need, can potentially enable progression of common works in mixed tenure blocks and in certain cases allow owners to remain in their properties as tenants. It also allows long term empty properties that may be causing a blight in the local community to be brought back into use. Recommendations It is recommended that the Committee: 1) Note the contents of the report and the current challenges in acquiring properties on the open market due to current market conditions. 2) Approve the targeted expansion of the scheme as set out in section 2.6 of the report to help prevent homelessness and enable private tenants to remain within their homes as council tenants. 3) Note that a further update will be provided to committee in 6 months, including potential options for further expansion of the scheme. 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. 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, and to consider proposals to expand the scheme further. 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 295 empty properties back into use at an average cost of £64,750 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 to allow the council to acquire the last remaining private property in a block to enable common works to progress by allowing the owner occupier to remain in their property as a council tenant. 2. Report 2.1 The Open Market Purchase Scheme has proved to be very popular with over 2,251 enquiries/ applications. In addition to enquiries/applications, staff proactively engage with sellers and their 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. Between 1 April 2021 and 31 March 2022, 75 properties were purchased and a further 10 properties have already been purchased in 2022/23 with a further 16 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 3 Bellshill 2 Bellshill 1 Coatbridge 9 Coatbridge 1 Cumbernauld 6 Cumbernauld 1 Kilsyth 3 Kilsyth 1 Moodiesburn 1 Moodiesburn 1 Motherwell 16 Motherwell 0
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Shotts 3 Shotts 0 Viewpark 4 Viewpark 0 Wishaw 6 Wishaw 2 Total 75 Total 10 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 1 0 0 Bellshill 2021/22 0 0 2 0 2022/23 0 1 0 0 Coatbridge 2021/22 1 6 2 0 2022/23 1 0 0 0 Cumbernauld 2021/22 0 2 3 1 2022/23 1 0 0 0 Kilsyth 2021/22 0 0 1 2 2022/23 0 0 1 0 Moodiesburn 2021/22 0 1 0 0 2022/23 0 1 0 0 Motherwell 2021/22 4 7 5 0 2022/23 Shotts 2021/22 0 0 0 0 2022/23 0 0 0 0 Viewpark 2021/22 1 1 2 0 2022/23 0 0 0 0 Wishaw 2021/22 0 4 2 0 2022/23 0 2 0 0 2.3 Of the properties purchased in 2021/22, 41 were categorised as having been long term empty properties, and 34 were purchased through the Open Market Purchase Scheme. In 2022/23 the 10 properties purchased to date are all categorised as being long term empty properties although in effect the two schemes have now been merged into one. All of the properties purchased were former council or Development Corporation properties.
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2.4 The number of applications for the programme have been lower so far this year compared to other years and more in line with 2021/22. In Quarter 1 of this year there had been 8 homes purchased with a further 12 at conveyancing stage which compares to 6 homes purchased and 21 at conveyancing stage at the end of Quarter 1 in 2021/22. Extrapolating the figure to the end of the year it would seem likely that this year approximately 75 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. 2.5 In terms of the expansion of the scheme approved at Committee in November 2021, so far there is one owner who has taken up this offer and a number of other blocks have been identified where there is one remaining owner who will be approached to make them aware of the opportunity. 2.6 There is anecdotal evidence that recent legislation changes such as the lifting of the evictions ban post Covid and current market conditions have resulted in a reduction in available properties for rent in Scotland as landlords decide to sell their properties with vacant possession, putting their tenants at risk of homelessness. It is proposed to explore the potential purchase of properties from private landlords where this would help prevent homelessness. This would be on the understanding that the existing tenants would remain in the property and would become a Council tenant. Suitable criteria would be developed in line with current procedures. 2.7 It is proposed to explore options to further expand the Buy Back scheme which could allow other properties to be acquired and brought back into council ownership while allowing owners to remain in their home as tenants. An update on any proposed further expansion of the scheme will be brought back to a future committee for approval. 2.8 As previously reported to committee, 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 discussions are on-going with the remaining owner while a Compulsory Purchase order is being progressed. 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
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Pamela Humphries Head of Planning and Regeneration 5. Impacts 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 Financial Solutions? Yes ☒ No ☐ If Yes, please provide a brief summary of the impact? A budget of £10.550m 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 13th July £335,491 has been spent on acquisition and repair, and £1.5m has been committed. The average purchase price of the properties acquired in 2022/23 is £70,083 and average repairs cost is £8,684. The Open Market Purchase Scheme is supported by the Scottish Government and in 2021/22 £2.25m of grant funding was received. However confirmation is still awaited from the Scottish Government regarding potential grant funding for properties purchased where owners/ private tenants remain in situ. 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 ☒
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If Yes, have all relevant HR impacts have been discussed and agreed with People and Organisational Development? Yes ☐ No ☐ If Yes, please provide a brief summary of the impact? 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 Solutions? 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 technology, has an assessment been carried out (or scheduled) 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?
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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? The expansion of the OMPS to enable certain tenants of private landlords to become North Lanarkshire Council tenants following the purchase of their home may result in increased demand from other landlords/owners who want to be provided with this option. There will therefore be clear criteria set out regarding the eligibility criteria.