A £1.2 million deal to buy back two former council houses in Brighton moved a step closer this afternoon (Wednesday 14 March).
The two buildings, in the Carlton Hill area, were sold to Orbit Housing Association for £190,000 in 1999 and contain a total of 15 flats.
They were sold with restrictive covenants, requiring the properties to be used as affordable housing.
Without the covenants, the two houses were estimated to be worth more than £2.3 million when they were valued almost two years ago.
Hoping to sell the buildings, Orbit wanted the covenants removed as the restrictions meant that the two buildings were worth only about £420,000 at the time.
Instead of removing the covenants, Brighton and Hove City Council instead entered talks with Orbit about buying back the homes which are rundown and need refurbishment.
The refurbishment is expected to add about £840,000 to the £1.2 million purchase price, bringing the total cost of the project to just over £2 million.
The council’s Housing and New Homes Committee voted unanimously in favour of a deal, with a final decision due to be made by the Policy, Resources and Growth Committee on Thursday 29 March.
But the Greens criticised the way that the council had ended up in this situation.
The party said: “Flogging off housing has wasted public money and it’s tenants who lose out when councils sell off properties.
“The property in Queen’s Park Ward was sold by the council in 1999 under a set of restrictions that ensured accommodation within the buildings would be let at affordable ‘social rent’ levels.
“Demand in the city for social housing is high, with over 17,000 people currently on the waiting list for council homes.
”Greens have stressed that previous decisions to flog off old council properties have reduced the amount of available social rented housing.
”Greens have also voiced concerns over plans to increase the rent levels for the property, which make it less affordable for those on low incomes.”
The party’s lead member for housing, Councillor David Gibson, said: “Here in Brighton and Hove we are drastically short of providing the amount of truly affordable rents and social housing the city needs.
“Instead of keeping existing homes and building more, Labour and Conservative governments sold off homes through the disastrous ‘right to buy’ scheme for years – over 2,000 were lost to our city this way.
“In 2006 Labour even tried to transfer all our council housing to a housing association.
“The Labour council is now in a position of having to spend £1.2 million buying back a property it originally sold off for £190,000.
”But the loss made on buying back this home shows the flaws in flogging off our housing stock.
“With house prices so high and still rising, Greens say the council should be buying more housing not selling it off.
“Greens support bringing housing back into council ownership but it should never have been sold in the first place.
“We continue to push the Labour council to bring emergency and temporary accommodation in-house, instead of forking out millions of pounds in public money to private landlords.
“Greens will hold the council to account over the increased costs of rent planned for these new properties.
“We want to see the cost of rent set at ‘living rent’ levels to ensure any new accommodation is genuinely affordable to those on low incomes.
“We must secure a better deal for our tenants. In the end, it’s clear that they are the ones who lose out when the council sells off properties the city desperately needs.”
He added that the Greens had also pushed the council to double the budget available to reclaim properties sold under the “right to buy” scheme.
Councillor Anne Meadows, who chairs the Housing and New Homes Committee, said: “There is a huge demand for housing in the city and, with the supply of low-cost rented homes not keeping pace, we’re looking at every opportunity to provide much-needed new homes.
“The covenant gives us a chance to get these properties back into use as affordable housing at a good value.
“We currently have over 1,600 households in emergency and temporary accommodation in the city.
“It’s a priority for us to develop high-quality council-owned temporary accommodation to help vulnerable households and reduce the use of more expensive accommodation.”
Councillor Clare Moonan said that the total project cost would mean 15 homes coming back into use at about £136,000 a unit, representing good value for money.
Councillor Mary Mears pointed out the huge property price rises across the board since 1999 and added: “I’m a critic of this administration on many things but I’m happy to support this. It’s a positive way forward.”
So how is the Partnership with Hyde going to pan out if the Council are going to spend about £60m as their share what value has been put on the land and will The Council retain 100% of the freehold?
The Greens do love a moan. They say more housing should be bought back, but they’re moaning that it’s being bought back. Moaning about a decision 19 years ago, as if it has anything to do with the current council. Didn’t see the Greens fix the problem when the were in power. Whereas the current Labour minority council has built tons of new, affordable homes. Imagine what they could do with a majority – where the Tories and Greens weren’t voting against the best interests of the city to try to make the Labour group look bad!