Agenda item

To consider evidence on the following:

·       Option Appraisal Update

·       Empty Homes

·       Feedback following the consultation regarding the Common Allocation Policy

·       National Planning Policy Framework implications for Affordable Housing

The Committee received a briefing on the implications of the National Planning Policy Framework (NPPF) for affordable housing, which included the reintroduction of housing targets. The policy set a new standard housing methodology to ensure housing need is reduced in areas with more affordable housing and increased where affordable housing is challenging and removed the requirement to deliver at least 10% of total homes on major sites for affordable home ownership. It was also no longer a requirement for 25% of affordable housing delivered via Section 106 agreements to be First Homes and the 10% small site allocation in local plans was no longer mandatory. The NPPF had been strengthened to encourage mixed tenure developments, while not preventing schemes that were mainly or entirely for Social Rent or other affordable housing tenures. It also stated that the provisions for social rents be considered when undertaking housing needs assessment and setting policies on affordable housing requirements. In addition, the definition of affordable housing for rent had been amended.

Members questioned what type of properties “build to rent” were, noted under mixed tenure developments, and if there was an impact for the borough. Officers clarified that this referred to developments whereby companies built and retained ownership which they then rented and managed. These types of developments were usually found in big cities where the company would get a better yield from renting, and not common in at this time Stockton-on-Tees.

Officers noted that the NPPF was positive for house building in general, however the full implications for delivery would not be known until the funding arrangements had been announced.

The Committee received a presentation regarding the ongoing affordable housing option appraisal, which outlined the objectives and options explored, along with the results of a preliminary market engagement (PME) exercise. The presentation also highlighted the strengths / challenges of a proposed hybrid approach that enabled an increased affordable housing delivery, directly delivered affordable housing through either opening a Housing Revenue Account (HRA) or Local Housing Company, a partnership structure and through the Local Authority (LA) enabling role.

The key issues highlighted and discussed were:

• Members questioned whether SBC would need to invest funding for the enabling approach to achieve 40% affordable housing on developments. Officers explained that 40% affordable housing would be the starting point  for example (i.e. above SBC’s current minimum affordable housing requirement) and, if that was not viable, then would work with the developer to ensure the maximum affordable housing that was viable for the site was built.
• It was noted that while a disposal of land via a disposal agreement would enable the Council to state what type of housing was built on a site, the site would be less valuable than if it was sold via land disposal/long lease disposal where the Council would have limited control over the type of development.
• Opening a HRA was discussed. Officers noted that if a HRA was opened and housing developed on a piece of land without a partnership arrangement, the Council would need to secure the investment and therefore borrow the funds. As funds could not be transferred in or out of a HRA, any funds borrowed to open it up would need to be paid back from the HRA. Opening an HRA was costly, and while officers stated it was difficult to predict how much it would cost, it could be £10s of millions depending on the housing development ambitions of a LA.
• It was noted that Local Housing Companies operated outside HRA rules and therefore the Council could build a site with 40% affordable housing, setting their own rent level ensuring it was viable, and sell the remaining 60% of housing to cross-subsidise the affordable housing.
• Right to Buy was raised and members questioned whether these rules would be applicable to homes built under HRA or Local Housing Companies. Officers stated Local Housing Companies tenants would not have access to Right to Buy. The government consultation was noted, and it was believed that the result of this could be a reduced discount for Right to Buy, longer qualifying periods, and Councils able to keep 100% of the receipts. Some bespoke schemes such as sheltered housing were excluded from the provisions of Right to Buy.
• Partnership working with Tees Valley Combined Authority and the four other Tees Valley Local Authorities was discussed. Only Darlington had a HRA and owned their own affordable/social rent housing, while Middlesbrough and Hartlepool had Mayoral Development Corporations that were also local planning authorities for all or part of their boroughs. Any cross boundary partnership might deliver the scale of development to achieve efficiencies but equally might dilute the positive influence and impact for Stockton-on-Tees’ residents.

The Committee received information regarding Empty Homes as follows:

• In October 2024 there were 3,150 empty properties in the Borough, which was 4.1% of the private sector housing stock. Of those, 1,308 were classed as long term empty, which was 1.7% of private sector housing stock. The reasons why a property was left empty varied but included the owner not being in a position to move in to the property and/or refurbishing the property, the owner moving into care, or the owner waiting for the market to improve before selling.
• The Council employed an Empty Homes Officer who would work with owners to support the return of a property back in to use, offering advice and assistance. Between April 2019 – June 2024 this had resulted in helping the owners of 256 properties being returned to use.
• There was also a Corporate Empty Homes Group, which included officers from Housing, Planning, Building and Enforcement services as well as the Fire Brigade, who had developed an Empty Property Priority List. The list currently contained 273 empty properties which had been identified via information received from members of the public, Council departments, Councillors and MP’s.
• While working with owners informally did work to bring properties back to use, for some properties enforcement measures needed to be deployed and the options available included Compulsory Purchase Orders, Empty Dwelling Management Orders, and Enforced Sale Procedures. These were costly both financially and in terms other resources.

Member questioned how long Compulsory Purchase Orders took and informed that it depended upon each individual case but could potentially be completed within 18 months (best case scenario). Similarly, timescales for Empty Dwelling Management Orders would be on a case by case basis but were potentially quicker at 12-18 months, and an Enforced Sale Procedure was quickest however there needed to be a debt on the property for it to be used. Other barriers for using legislation were discussed including how the property owner could reclaim the property throughout the process, and even several years after the Council had taken over management for Empty Dwelling Management Orders.

The North Star scheme in North Thornaby was raised, currently five empty properties had been purchased and refurbished by the Registered Provider. North Star received a grant of £400k from the Council and were required to return a minimum of 10 empty properties to use, this funding made the development viable for them. Officers explained that the funding came from the Town Deal. Historically Homes England would fund developments of empty properties however currently there were no funds to support schemes of this kind.

The increased council tax rates for empty properties were also raised and members were informed that the owners of a property empty for 5 – 10 years were charged double council tax and owners of properties empty for more than 10 years were charged triple council tax. The Committee requested a breakdown on the number of properties in each category.

Feedback was received from the Tees Valley Home-Finder Common Allocation Policy, which proposed several changes to the policy regarding the following:

• Local connection
• Anti-social behaviour
• Priority banding
• Band one plus for demolition or regenerations
• Armed Forces Community
• Homelessness
• Young People leaving the care of the Local Authority
• Medical grounds
• Child protection special guardianship order
• Acute overcrowding
• Senior management discretion

The Committee were informed that there was a positive response to the proposals with respondents agreeing or strongly agreeing with them, and less than 10% of residents strongly disagreed with all questions. The Steering Group had therefore agreed to proceed with the proposals and a new policy would be drafted.

The Committee discussed the increase in exclusion from joining the register from 12 to 36 months for those served notice, evicted, or had a property closure for anti-social behaviour. Officers informed that this would be seen as more of a deterrent than the 12 months in the current policy as they would find it harder to secure somewhere to live for that period. Members questioned whether the person would receive the same banding after the 36 months and informed that they would be treated as a new applicant and had to be reassessed based on new circumstances. Members further questioned the support they would receive if they were in crisis/homeless, and informed that they would receive assistance to secure private sector housing if they were excluded from Tees Valley Homefinder.

Officers noted that while the policy was anticipated to be presented to Cabinet in April 2025, there would be a long implementation stage as work to procedures and modification to IT systems would need to be completed, along with staff training for stakeholder partners.

Members received current information on housing demand in the borough including:

• The number of live applications on Tees Valley Home Finder by band, bedroom need, and household type, showing that the majority of people on the register were single with a one bedroom property need and the largest band was band 4.
• Average number of properties advertised, and average number of bids received, demonstrating that the number of bids outstripped the number of properties advertised. It was noted that there had been a decrease in the number of bids in Q3 of 2024/25 which was believed to be due to Christmas.
• Average time taken from application to nomination in 2024/25 by band, showing that the shortest time taken was for those in band 1, with the exception of Quarter 2, when the shortest time taken was for those in band 2. It was noted that the figures only related to people on the register who had been successful in securing a property, and not those who remained on the register.
• The number of affordable homes delivered and projections for new build delivery based on pipeline schemes up to 2028/29, was detrimentally impacted by the uncertainty around future Homes England funding (post 2026), increased material costs, and additional regulatory requirements which were resource intensive for Registered Providers.

AGREED that:

1)    the information be noted.

2)     the further information be provided as requested.