Meeting documents

APPENDIX 1

1 THE ISSUE

1.1 The Bath Housing Co-operative currently occupies Mount Beacon Lodge on a licence arrangement with Solon Housing Association who lease the property from the Council (as freeholder). The lease with Solon has come to an end and the Council intends to seek possession. Bath Housing Co-operative wishes to lease the property directly from the Council to enable the current occupants to remain.

2 RECOMMENDATION

The Executive member is asked to consider one of the two following options:

1 That Mount Beacon Lodge is leased directly to Bath Co-op, for a period of three years with a schedule of improvements that the Co-op would be required to undertake to assist in modernising the property (the terms of the lease, including rent and schedule of works to be negotiated by property services).

2 That Mount Beacon Lodge is recovered from Solon with vacant possession and sold on the open market with the capital receipt being added to the council's capital receipts fund.

3 FINANCIAL IMPLICATIONS

3.1 Within the current financial environment, the effective use of Council resources is important. Currently this asset is not producing an income or demonstrating it is providing other tangible benefits that represent value for money. The Councils capital procedures require that when an asset is sold the proceeds are added to the central capital receipts fund and can not be kept within the service for reinvestment.

4 MOUNT BEACON LODGE

4.1 Mount Beacon Lodge (a detached house just off Lansdown Hill, Bath) was leased to Solon Housing Association as temporary accommodation in 1980. Bath Housing Co-op has been running Mount Beacon Lodge under a housing management arrangement with Solon Housing, and currently has 3 residents in the property. The property is in need of modernisation and refurbishment.

4.2 The Council does not currently receive rental income for Mount Beacon Lodge from Solon HA.

4.3 Property Services have valued the property at approximately £350,000 with a market rent in the region of £1,200 per calendar month.

4.4 If the council were to grant a new lease to the Co-op they have said that they would be able to pay a rent of £90 per month and would make a commitment to gradually improve the property over the term of the lease. If this arrangement were to be accepted the Council would forego in the region of £10,000 per year (assuming the Co-op invested £3,320 per year in the property). A three year lease directly with Bath Co-op, with a schedule of improvements that are required would assist in modernising the property (Option1).

4.5 If the property was recovered from Solon with vacant possession and sold on the open market the capital receipt would have to be added to the councils capital receipts fund (Option 2).

5 RISK MANAGEMENT

The report author and Executive member(s) have fully reviewed the risk assessment related to the issue and recommendations, in compliance with the Council's decision making risk management guidance.

6 RATIONALE

6.1 Taking into account the Council's statutory duty to homeless families and other vulnerable people, the need to limit the use of bed and breakfast accommodation and the lack of decent affordable family housing in Bath compared to the relative abundance of shared housing for single people, the benefit of using the sale proceeds for the provision of affordable family housing would outweigh the loss of the accommodation for Co-op members if we were able to reinvest the receipt in new affordable housing. However, because the receipt would go into the capital receipts fund this option appears less attractive.

7 OTHER OPTIONS CONSIDERED

7.1 A third option would be to refurbish the property and let it on the open market and to use the rental proceeds to support the provision of social housing grant (Option 3).

8 CONSULTATION

8.1 Meetings have been held with the Co-op to discuss the future of Mount Beacon Lodge.