Agenda item

To adopt LAPP in accordance with the outline provided within the report, and approve the following parameters:

• The maximum local authority purchased (rented) share of £120k
• The split between the two shares of 70% purchased via mortgage and 30% purchased by LA
• The maximum limit for the total indemnity to be offered of £4.4m
• The maximum loan size (based on maximum property valuation) of £266k
• The qualifying post codes in a schedule to the indemnity deed to cover all in SBC area
• Based on these parameters, a maximum investment of £9.3m (£13.7m total costs including repayment interest) would be required (plus a further £4.4m indemnity guaranteed by way of a deed) to provide approximately 100 mortgages via the scheme.

The Assistant Director Finance & Audit introduced a report which recommended adoption of the Local Authority Partnership Purchase (LAPP) scheme which would provide targeted help to potential home-buyers on a shared ownership basis and deliver a good return on the Council’s financial investment.  In considering the report, Commissioners noted the further information provided in the Part II Appendices A and C, without disclosing any exempt information.

The scheme was an extension of the shared ownership model with mechanisms to overcome the negatives of current such schemes, for example LAPP allowed open market purchases and was not restricted to certain shared ownership properties.  The basic model was a 70/30 percentage ownership split between the property occupier and the Council, with the Council receiving a revenue income stream and capital appreciation from its investment.  The report had been considered by the Overview & Scrutiny Committee on 10^th September 2015 and it had recommended to Cabinet that key workers and people with local connections, similar to the local eligibility criteria in the Housing Allocations Scheme, be given priority under LAPP.  The Committee also recommended that the scheme not be made available to buy to let landlords.

The Cabinet recognised that the scheme potentially had both a positive policy and financial impacts both in terms of supporting local housing need and delivering strong returns on investment.  The concept of the scheme was welcomed and the Cabinet endorsed the comments of the Overview & Scrutiny Committee that some priority be given the key workers and other target groups.  It was agreed to adopt the scheme in accordance with the recommended parameters and that the necessary adjustments to the Capital Strategy be recommended to full Council.

Resolved –  That LAPP be adopted in accordance with the outline provided within the report and that the following parameters be approved:

·  The maximum local authority purchased (rented) share of £120k

·  The split between the two shares of 70% purchased via mortgage and 30% purchased by LA

·  The maximum limit for the total indemnity to be offered of £4.4m

·  The maximum loan size (based on maximum property valuation) of £266k

·  The qualifying post codes in a schedule to the indemnity deed to cover all in SBC area

·  Based on these parameters, a maximum investment of £9.3m (£13.7m total costs including repayment interest) would be required (plus a further £4.4m indemnity guaranteed by way of a deed) to provide approximately 100 mortgages via the scheme.

Recommended –  That the necessary adjustments to the capital programme be made to provide for the introduction of the LAPP scheme.