EAST AYRSHIRE COUNCIL
CABINET REPORT – 21 NOVEMBER 2018
HOUSING ASSET MANAGEMENT FRAMEWORK PROGRESS REPORT
Report by Depute Chief Executive (Safer Communities)
INTRODUCTION
1. The purpose of this report is to provide an update on Housing Asset Management Framework activities and to make a number of recommendations to Cabinet.
BACKGROUND
2. The development of the Housing Asset Management Framework will contribute to achieving the vision of East Ayrshire’s Local Housing Strategy:
“Everyone in East Ayrshire can afford to access a quality home that meets their needs and aspirations, and is located within a safe and attractive neighbourhood in which they are proud to live.”
3. The purpose of the Housing Asset Management Framework (HAMF) approved by members of Cabinet on 24 February 2016 is to provide a framework for managing our property assets to ensure that they contribute efficiently and effectively to the achievement of the Council’s aims and objectives, both now and in the future, while ensuring that we retain vibrant communities with good quality homes. There was recognised to be a need to ‘future-proof’ the Council housing stock to enable us to respond to areas of declining population and the changing demographic by working closely with colleagues in the Health and Social Care Partnership (HSCP).
4. The HAMF was developed taking cognisance of the existing Housing Needs Demand Assessment, and Local Housing Strategy to ensure that East Ayrshire’s housing stock meet the present and future needs of our tenants, sustainability of tenancies is improved and that the best use of our resources is made. The key objectives of the framework are:
Ensuring that the Council has a sustainable, quality housing stock within strong and vibrant communities. Using resources as efficiently and effectively as possible. Maximising resources for further investment in existing and new stock.
5. The Council’s approach to ensuring that there are vibrant, sustainable communities is concerned not just with environmentally friendly new homes but with the physical and social condition and stability of our neighbourhoods.
6. This is reflected in the Council’s approach to community regeneration by utilising the outcome of the HAMF review to fully inform our strategic approach towards both the Strategic Housing Investment Plan (SHIP) and the Housing Investment Programme (HIP). As a result these papers will follow this report.
7. The HAMF approach and associated matrix gives us an up-to-date comprehensive and reliable information base. This will inform a clear analysis on performance, value for money and highlight the value that properties are bringing to the Council.
8. The agreed matrix was developed utilising guidance from the Scottish Housing Regulator’s recommended practice on Strategic Asset Management. It assesses housing stock in terms of overall performance and from a housing management perspective using a range of qualitative and quantative data including property type, size, location, construction type, current and anticipated demand for the property, void levels, rent loss, refusal rates, management costs, energy efficiency ratings and major investment costs.
9. The HAMF approach and matrix identifies stock into 3 categories of red, amber and green. This information is then considered by a cross service review team with officers from Housing Services, Housing Asset Services, Finance, Estates, Legal Services, Vibrant Communities, Planning and Economic Development and the Health and Social Care Partnership (HSCP) for each of the housing management areas. Stock is then categorised with the following potential solutions:
i. Housing Management Action; ii. Acquisition/Disposal of house or site; iii. Demolish and clear e.g. stock no longer suitable and cleared site not considered appropriate for new build Council housing; iv. Demolish and refresh linked to Strategic Housing Investment Plan e.g. stock no longer suitable and cleared site to be developed for new build housing; v. Stock transfer e.g. could a Registered Social Landlord be better placed to manage stock linked to their own stock holding; vi. Improvement e.g. could external or internal improvements be made to improve the demand for the stock and help sustain tenancies.
10. The approach and matrix has been utilised over the last two years with recommendations presented to Cabinet on 30 November 2016 and 29 November 2017 respectively. This approach is a long-term and far reaching approach to review our own stock initially and then applying a range of options to ensure delivery of the right houses in the right place at the right time.
11. There has been significant programme of works undertaken through buy-backs of former council housing and the requirement to re-house affected tenants to facilitate this. Over the past two years properties identified by HAMF and linked to SHIP, we have found suitable alternative accommodation for 369 tenants and bought back 46 properties. Work is also progressing with acquisitions or sales in mixed tenure blocks or to respond to specific housing needs. We have in the past two years in line with HIP paper brought back into Council ownership 5 properties which gives the Council full ownership of blocks with a further 11 under consideration and there are 13 properties being processed for sale. The strategic acquisition of new or good quality homes helps to build value to the asset base for the future of the Council as well as meeting the particular needs of residents and their families. The process of strategic disposal assists with Housing Improvement Programmes.
HAMF MATRIX RESULTS
12. The results of the matrix for the lettable stock is summarised as follows:
Table 1 RAG Definition Total % of Total % of Total % of status numbers stock numbers stock numbers stock 2016 2016 2017 2017 2018 2018 Properties that have been identified as core Green stock which 10358 81.8% 10337 86.2% 10207 86.4% performs well and has little or no concerns. Properties that have been identified as having Amber an element of 1620 12.8% 1223 10.2% 1238 10.5% concern but do not fall into the Red Status category. Properties that have been identified as being Red 680 5.4% 432 3.6% 370 3.1% “cause for concern” with regard to sustainability Total 12,658 100% 11,992 100% 11,815 100%
13. The numbers of stock categorised as red has fallen due to the recommendations implemented over the last two years and various Housing Service improvement measures that have been implemented with improvements in tenancy sustainment and the time taken to re-let void properties.
14. The Housing Service Improvement Group continues to identify ways in which we can implement further improvements. Management actions have included:
Void plus – We have introduced an ‘estate agent’ approach to the allocation of long term voids. These properties have been brought up to a high standard including full decoration internally. We then promote the property within the local community through advertising in Council offices, the Council’s website and other social media platforms. As a result, a number of long term void properties have been brought back into the letting pool in Irvine Valley and Cumnock and Doon Valley.
Neighbourhood Coaches –Neighbour Coaching as an ethos was piloted amongst Housing staff within the Doon Valley Area to promote self-reliance amongst customers, helping people to help themselves. Having a different conversation with customers to identify their needs and providing a supportive approach to removing dependency.
In addition the Council is employing 7 Neighbourhood Coaches to work throughout East Ayrshire to help and support people through claiming UC working through the many obstacles to making and supporting claim. Developing customer skills so they can flourish in life and work through identifying needs and matching those needs to services.
Tenancy start matrix has now been fully implemented across all allocation areas where key factors are looked at where tenancies may fail and/or putting in place additional support for as long as needed.
Tenancy health check tenancies have a tenancy health check at 6, 9 and 12 months to ensure that suitable support is in place to allow our customers to sustain their tenancies. Our tenancy sustainment performance has shown improvement over the period of implementation.
15. When analysed, the majority of red status stock was found to be concentrated in 2 of the Housing Management Areas (HMA) as follows:
Table 2 Housing Management Area Total % of red % of total red numbers stock in HMA stock across 2018 EA Cumnock and Doon Valley 210 5.5% 56.8%
Irvine Valley and Ballochmyle 124 4.7% 33.5%
Kilmarnock North 16 0.7% 4.3%
Kilmarnock Central and South 20 0.7% 5.4%
Total Reds 370 3.1% 100%
16. A series of meetings were held by the cross service review team for each of the housing management areas and stock categorised accordingly. The review ensured that where in place, the future recommendations were aligned with Community Action Plans and linked with tenants and residents groups.
17. In the Catrine, Newmilns, Auchinleck, Muirkirk areas, given the nature and impact of proposals it was considered appropriate to engage with residents through Information events to extend the Council’s reach beyond existing organisations and networks and to engage with communities in more flexible, responsive ways. All residents were invited to attend the events and given the opportunity to provide ideas and discuss different options for streets within the area, these consultation took place in November 2018. These were also attended by representatives from the East Ayrshire Federation, local Community Action Plan groups and Community Councils. An additional consultation with the East Ayrshire Federation took place in November 2018.
18. The feedback received from these events has been used to inform the outcomes recommended in this report and have led to housing management action being implemented. These events show the Council’s commitment to putting people at the heart of everything we do and it provided an opportunity for community led place-making and to develop further the Clean Green and Vibrant approach linked to the ongoing delivery of the Community Action Plans and the environmental improvements within communities decided by Participatory Budgeting events in some areas.
19. There will be ongoing discussions about housing within communities as this work progresses. Contact has also been made with residents who are directly impacted by the proposals and full support and advice will be given ensuring their housing needs will be met in the future.
20. The detailed recommendations of the group in respect of each Housing Management Area are outlined in the attached appendices 1-7. The recommendations within this report would result in a reduction in 28 void properties. This will have a positive impact on the Council’s nationally reported performance within the Annual Return on the Scottish Social Housing Charter in areas such as void rent loss, time taken to relet void properties, tenancy sustainment and refusals of offers of housing.
21. Elected members were given the opportunity to attend a briefing/drop in session in November 2018 in relation to this work. In order to build on the work undertaken to date, early arrangements will be put in place to inform affected local communities of the recommendations within this report. Full engagement has taken place with Housing staff who will continue to work closely with and serve our tenants to ensure the recommendations within this report are implemented.
22. In addition to the housing stock considered as part of the above exercise, a number of properties and areas have been identified where future determination is required.
ST CUTHBERT’S STREET, CATRINE
23. In accordance with the Housing Asset Management Framework Report submitted to Cabinet on 29 November 2017, Members approved a recommendation to undertake a Feasibility Study of the tenement housing stock within St. Cuthbert Street and to engage with local residents to develop an Options Appraisal Report for consideration. The housing stock is of mixed tenure and consists of 28 one and two bedroom terraced flats. The Council retains ownership of 21 flats, with 7 flats being privately owned. A more in depth analysis of St Cuthbert’s Street can be seen in Appendix 5-7.
24. The void rent loss highlighted in Table 2 reflects the significant rent loss attributable to these properties over the last 3 years, with the average void period being 2/3 years.
Table 3: Rent loss 2015-2018
YEAR RENT LOSS(£) 2015/16 8,184.39 2016/17 16,609.06 2017/18 22,176.95 TOTAL 46,970.40
25. A Conversation Café was held locally on 3 May 2018 and all residents living in St. Cuthbert’s Street were invited to attend the event to seek their views on their preferred option for the future of the flats. This consultation event was designed to inform the Council’s proposals to address both the identified problems associated with the stock’s condition and its ongoing sustainability.
26. The event was attended by a total of 20 people, of a possible 21 residents, consisting of 8 Council tenants, 5 private owners, and 1 tenant of a privately rented property. 6 other members of the local community also attended the event.
27. As a result of the consultation work undertaken, along with the feasibility outcomes available to date and taking into account the conservation area status, it is proposed:
Table 4 - Proposals
No. PROPOSALS £ (i) Subject to all owners’ consent to pay their share £1.393m of costs, all improvement works to be carried out Per owner share by the Council. Scheme of Assistance grant £27,852.90 (ex availability will be discussed with individual VAT) owners. (ii) Where unanimous agreement is not reached, it £56,000 is proposed to relocate Council tenants and dispose of Council-owned stock. Properties (Home loss and would not meet Scottish Housing Quality Disturbance Standard due to externals/access issues, the payments: 14 x extent of repairs and improvements required £1,750). Legal and the detrimental impact being experienced costs for disposal by residents on their health and wellbeing, due 21 x £1,500 to the known dampness issues. Where those £31,500 remaining owners who do not wish to excambion or to sell their properties to Council, the Council would actively market Council-owned properties for a period of 12 months so as to dispose of them. In the event no disposals are achieved, a status report would be brought back to return to Cabinet to seek further determination. (iii) Relocate Council tenants, acquire ex-Council £285,400 owned properties from owners and market to dispose of all stock as a portfolio, or as individual (£24,500 Home units. All owners are given the opportunity to loss and excambion, that is to say move from their current Disturbance properties to a Council-owned property that payments EAC meets their housing needs, transferring tenants: 14 x ownership either to a property within Catrine, £1,750). given a number of properties are immediately (Buybacks: 3 x available, or elsewhere in the authority area £25K, 4 x £31K, + subject to the individual needs and aspirations homeloss of the owners. Where owners do sell/ £19,900. legal excambion their properties within St. Cuthbert costs for disposal Street, the Council would actively market the £42,000 building for disposal as a portfolio for a period of 12 months. Again, in the event no disposal is achieved, a status report would be brought back to return to Cabinet to seek further determination. (iv) Relocate Council tenants. Promote a £24,500 Community Asset Transfer of Council-owned stock. (£24,500 Home loss and Disturbance payments EAC tenants: 14 x £1,750
HAMF IMPLEMENTATION – THE NEXT STEPS
28. In order to take forward works to ensure we provide a sustainable, quality housing stock within strong and vibrant communities there are implications for how we prioritise future SHIP and HIP resources. The findings of the HAMF review and consideration of the Housing Needs and Demands Assessment has informed the recommendation in these papers. It is anticipated that the updated Housing Needs and Demand Assessment will be published alongside the Local Housing Strategy in April 2019.
29. The progress against actions will be monitored through the Future Homes Board and, as previously reported to Cabinet, the HAMF matrix will be run as an annual exercise to inform future strategy. It is intended to develop this approach further in future years with the incorporation of a financial assessment of stock to complement the existing HAMF matrix. Details of this will be presented to Cabinet in due course. The poorer performance in some of the properties suggests a key strategic challenge which includes the pace at which poorly performing units can be replaced with other house types suited to the demographic and population shifts expected in East Ayrshire.
30. NPV is an appraisal tool used to highlight over a reasonable time frame, those properties which are currently putting downward pressure on the long-term business plan and which are financial liabilities rather than assets in cash valuation terms and by preventing any future erosion of the value already in those properties which are performing. This appraisal assists in decision making around properties and their long term viability
Relocating affected residents
31. Building on our experience in the last two years, we will liaise closely with affected tenants and residents to ensure we put people at the heart of everything we do by offering a person-centred approach with individual engagements. We offer a range of options to affected residents who receive priority for re-housing by being placed in the Strategic Needs Group in terms of the Common Allocations Policy. This includes liaising with partner RSL’s regarding availability in their stock portfolio. Council Tenants will also receive home-loss and disturbance payments where appropriate.
32. Affected home owners have received a range of options including selling, selling and becoming a Council / RSL tenant or entering into an excambion where we effectively swap their house for another similar council house.
Further Housing Management proposals
33. Further Housing Management Actions are proposed to improve tenancy sustainment and the time taken to re-let void properties. The decoration pack scheme piloted successfully in the Kilmarnock Northwest Area has now been implemented across all Housing Management Areas and has replaced the decoration allowance scheme.
34. In terms of the existing Scheme of Delegation, the Depute Chief Executive: Economy and Skills as Chief Financial Officer has powers to recommend to Council “To authorise or vary the principal terms and conditions of acquisition, internal transfer and disposal of all interest in land and property up to £1M on the terms and conditions recommended by the Solicitor to the Council so long as budgetary provision existed for acquisitions following representation from the Councils Estates Section”.
35. It has been agreed on 29 November 2017 that that the Head of Housing and Communities in conjunction with the Solicitor to the Council has delegated powers to approve any house disposal that is not less than 75% of the Homebuyers report valuation.
FINANCIAL IMPLICATIONS
36. The cost to implement the stock improvements identified on appendices 1-7 will total £2.390m. It is anticipated that this will be funded from HRA balances.
37. Appendices 1-7 also outline potential disposals. At this time it is uncertain how many of these will be concluded. It is intended that any receipts relating to these disposals will be utilised (i) to fund future acquisitions (ii) replenish balances utilised at paragraph 36 above.
RENT SETTING AND CONSULTATIONS
38. As part of the rent setting strategy for 2019/20 to enable the delivery of the Strategic Housing Investment Programme (SHIP), Housing Improvement Programme (HIP) and Housing Asset Management Framework (HAMF), it is proposed to undertake a comprehensive consultation period on the following proposals.
39. The intention is to split the rent increase proposals to allow tenants to choose a specific option:
Proposal 1 (19/20) A rent increase of 1.5%, an average of £1.17 per week over 48 weeks (£1.08 over 52 weeks). This would cover the costs of all the proposals outlined in the HAMF, HIP and SHIP. The impact of this increase is shown in the table below. The budgeted transfer of reserves of £1.564m will not be required in 2018-19 due to in-year underspends within Housing Revenue Account. Due to the level of HRA balances held this will be increased to £2.014m for 2019-20.
Annual Estimate Annual Estimate Detail 2018/19 2019/20
EMPLOYEE COSTS 13,499,530 14,356,690
PREMISES COSTS 6,442,040 6,101,730
TRANSPORT COSTS 1,021,560 1,021,560
SUPPLIES & SERVICES 13,222,930 13,017,440
THIRD PARTY PAYMENTS 2,368,900 2,368,900
DEBT CHARGES 8,354,560 8,354,560
CFCR 10,183,910 10,183,910 HOMELESS HOSTEL 771,340 771,340 TOTAL EXPENDITURE 55,864,770 56,176,130 INCOME - Rent (45,684,750) (45,530,280) INCOME - Other (7,844,680) (7,860,510) INCOME - Homeless Hostel (771,340) (771,340) TOTAL INCOME (54,300,770) (54,162,130) Transfer from Reserves (1,564,000) (2,014,000) Affordable Housing Fund 0 0 NET EXPENDITURE 0 0
Proposal 2 (19/20) A rent increase of 2.5%, an average of £1.95 per week over 48 weeks. (£1.80 over 52 weeks). This would allow the development of further improvement programmes of more homes receiving full external render improvements or more homes receiving new energy efficient double glazed windows. The impact of this increase is shown in the table below. The impact of this increase is shown in the table below. The budgeted transfer of reserves of £1.564m will not be required in 2018-19 due to in-year underspends within Housing Revenue Account. Due to the level of HRA balances held this would be utilised in 2019-20.
Annual Annual Estimate Detail Estimate 2018/19 2019/2020
EMPLOYEE COSTS 13,499,530 14,356,690
PREMISES COSTS 6,442,040 6,101,730
TRANSPORT COSTS 1,021,560 1,021,560
SUPPLIES & SERVICES 13,222,930 13,017,440
THIRD PARTY PAYMENTS 2,368,900 2,368,900
DEBT CHARGES 8,354,560 8,354,560
CFCR 10,183,910 10,183,910
HOMELESS HOSTEL 771,340 771,340
TOTAL EXPENDITURE 55,864,770 56,176,130 INCOME - Rent (45,684,750) (45,980,280) INCOME - Other (7,844,680) (7,860,510) INCOME - Homeless Hostel (771,340) (771,340) TOTAL INCOME (54,300,770) (54,612,130) Transfer from Reserves (1,564,000) (1,564,000) Affordable Housing Fund 0 0 NET EXPENDITURE 0 0
40. The rent increase proposals is exclusive of rent harmonisation which would also be applied as previously agreed by Cabinet on 20th May 2015 and 7th October 2015. It was agreed that no individual rent should go up by more than £6 per week, based on 48 weeks (but adjusting this value to take account of inflation over the period of implementation) including the annual rent increase. By 2018- 19 inflation had increased this figure to £6.50. The consultation with tenants and Registered Tenants Organisations is anticipated to commence from Monday 3rd December 2018 and Friday 11th January 2019 inclusive. All tenants will have the opportunity to engage with the consultation.
LEGAL IMPLICATIONS
41. In respect of any property disposals, following the publication of recent Guidance on Scottish Ministers’ Consent to Disposal of Assets from Housing Revenue Accounts, general consent is deemed to be granted. Both Council tenants and owner occupiers are entitled to Home Loss and Disturbance payments in terms of sections 27-29 of the Land Compensation (Scotland) Act 1973 as amended.
POLICY / COMMUNITY PLANNING IMPLICATIONS
42. This Asset Management Framework has been developed to ensure that East Ayrshire’s council housing stock meet the present and future needs of tenants, sustainability of tenancies is improved and that the best use of resources is made. It puts in place safeguards to ensure that decisions taken on the future of the council housing stock are based on sound evidence. The framework is compliant with the Scottish Housing Regulator’s guidance and supports the objectives set in the Local Housing Strategy.
43. The Housing Asset Management Framework supports the guiding principles of the Community Plan. The framework links with the guiding principle of Safer Communities by making East Ayrshire a safe, secure and attractive place to live, work and visit and by promoting vibrant communities. It also links to the key principle of Wellbeing by helping residents to improve their overall wellbeing and by supporting older people to live within their own homes and communities.
TRANSFORMATION STRATEGY
44. The Housing Asset Management Framework links to the Council’s Transformational proposals and highlight the Council’s commitment to the following work streams:
Fairer, Kinder and Connected Vibrant and Empowered Property and Estate
The implementation of the Housing Asset Management Framework across East Ayrshire supports and promotes the Council’s commitment to the Transformational work streams set out and the key actions contained therein.
RISK MANAGEMENT IMPLICATIONS
45. Risk is managed in a systematic way, initially by the Council’s review team and on an ongoing basis by the Future Homes Board.
ASSET MANAGEMENT IMPLICATIONS
46. The clear strategic approach set out in this Housing Asset Management Framework will ensure that the housing stock being retained is performing well and meets the needs and aspirations of the people we serve. Decisions relating to disposal and investment will be based on a sound business case focussed on improved performance with regard to sustainability and void management.
EQUALITIES IMPACT ASSESSMENT
47. The development of the SHIP 2018-23 programme has taken into account the outcomes of the equalities impact assessment which was undertaken for the Housing Asset Management Framework, Strategic Housing Investment Plan and Housing Investment Programme. These concluded positive impacts would be delivered in terms of meeting the housing and support requirements of: older people; those with disabilities; and people with other particular needs. The SHIP will deliver properties designed to meet a range of requirements, and provision has been made within the programme for resources to assist in delivering adaptations.
RECOMMENDATIONS 48. Cabinet is requested to:
i) Note progress made on the Housing Asset Management Framework activities;
ii) Approve the recommendations as outlined in appendices 1-4;
iii) Approve Recommendations outlined in Paragraph 27;
iv) Approve the proposed Decoration Pack as outlined at paragraph 33;
v) Approve the use of HRA balances outlined at paragraph 36;
vi) Approve the Rent Consultation as outlined in paragraph 37-39;
vii) Otherwise note the contents of this report.
Katie Kelly Depute Chief Executive (Safer Communities)
7 November 2018
BACKGROUND PAPERS – Nil
Implementation officer: Robert McCulloch Acting Head of Housing and Communities (Safer Communities)
For further information on the content of this report contact: Blair Millar, Housing Services Manager on 01563 554897 or Kevin Hamilton, Customer Liaison Officer on 01563 553591
HAMF Appendix 1 Cumnock Doon Valley Position (Total Stock Property - No. Void, No. Red, Category Background Information Recommendation No. CHS 13-19, 21-27 Quarry Knowe, Auchinleck 1. Authorise relocation of tenants together with homeloss and Total - 8 Bedsite 1 bed accommodation with a high turnover and issues with sustainability. All disturbance payments. Void - 1 Demolish and Refresh linked to SHIP Council owned properties in block. Feasability study being done in terms of mini assisted 2. Authorise demolish and refresh area Red/Amber- 6 living model on site. demolish site, relocate tenants and link to SHIP 3. Refer to SHIP CHS - 0 Total - 4 1. Declare surplus for disposal of properties Block of 4 terraced houses sit within an area with high concentration of owner occupied 2. Authorise relocation of tenants together with homeloss and properties. These are hard to let properties. An estate agent approach to actively advertise 14 - 20 Garpel Avenue, Muirkirk Void - 0 Disposal disturbance payments. properties for sale and relocate tenants as part of a consolidation of stock across the whole Red/Amber - 4 village. CHS - 0 Total - 4 1. Declare surplus for disposal of properties Block of 4 terraced houses sit within an area with high concentration of owner occupied 2. Authorise relocation of tenants together with homeloss and properties. These are hard to let properties. An estate agent approach to actively advertise 57 - 63 Pagan Walk, Muirkirk Void - 0 Disposal disturbance payments. properties for sale and relocate tenants as part of a consolidation of stock across the whole Red/Amber - 4 village. CHS - 0 Total - 12 1. Declare surplus for disposal 3 bed properties in hard to let area, no demand for this type of stock. Proposed marketing 2. Authorise relocation of tenants together with home-loss and 29 - 35, 62-68, 25-27 & 58-60 Hareshaw Void - 1 Disposal of properties, relocate tenants as required, disposal properties as part of a consolidation of disturbance payments. Crescent, Muirkirk Red/Amber - 12 stock across the whole village. CHS - 0 Total - 4 1. Declare surplus for disposal of properties Block off 4 terraced houses sit within an area with high concentration of owner occupied 2.Authorise relocation of tenants together with homeloss and properties. These are hard to let properties. An estate agent approach to actively advertise 133 - 139 Henderson Drive, Muirkirk Void - 1 Disposal disturbance payments. properties for sale and relocate tenants as part of a consolidation of stock across the whole Red/Amber - 4 village. CHS - 0 HAMF Appendix 2 Kilmarnock Northwest Position (Total Stock Property - No. Void, No. Red, Category Background Information Recommendation No. CHS 6f & 14e Knockinlaw Mount, Kilmarnock Total - 12 1. Refer to HIP Paper Void - 0 Tenement flatted properties, with the aesthetic of these Red/Amber - 7 Improvement properties affecting the ability to let. Refer to HIP CHS - 0 programme and garden improvements to all properties.
37 - 153 Knockinlaw Road, Kilmarnock Total - 82 1. Refer to HIP Paper Void - 3 A mixture of terraced and semi detached properties. Aesthetic of these properties affecting the ability to let. Red/Amber - 14 Improvement Refer to HIP programme and garden improvements to all properties. CHS - 17 2- 98 Morven Avenue, Kilmarnock Total - 47 1. Refer to HIP Paper A mixture of terraced and semi detached properties. Void - 2 Aesthetic of these properties affecting the ability to let. Red/Amber - 7 Improvement Refer to HIP programme and garden improvements to all properties. CHS - 7 21 &23 Ladeside Gardens, Kilmaurs Bungalow properties with technical and environmental 1. Authorise feasibility study around all options and impact to tenants. Total - 2 Improvement issues. Feasabiltity studies to be carried out around all Void - 2 cost options and impacts on tenants. 2. declare surplus and demolish and clear site Red/Amber - 2 Demolish and Clear CHS-0 44/1 - 44/5 & 46a-46f Lainshaw Street, 1. Authorise relocation of tenants together with home-loss and disturbance Stewarton Total - 11 Requires extensive amount of work with significant costs payments. to bring back to letting standards. Recommend disposal 2. Thereafter Declare Surplus for disposal Void - 0 Disposal of all last in block properties above shops. To tie in with strategic aquisiitions in high demand area. Apply estate Red/Amber - 3 agent approach to disposal. CHS - 8 HAMF - Appendix 3 Kilmarnock Central
Position (Total Stock Property - No. Void, No. Red, Category Background Information Recommendation No. CHS Total - 6 1. Refer to HIP Paper 37a & 37e Hurlford Road, Void - 0 2/3 bed tenement properties. Already part of Housing Improvement Program. Improvement Kilmarnock Red/Amber - 2 Refer to HIP paper. CHS - 1 Total - 15 1. Refer to HIP Paper Housing Management Action 4a - 4i & 9b - 9h Wallachill Road, Void - 2 Intensive tenancy management. Along with works as part of HIP paper. Kilmarnock Red/Amber - 3 Improvement CHS - 0 HAMF - Appendix 4 Irvine Valley Ballochmyle
Position (Total Stock Property - No. Void, No. Red, Category Background Information Recommendation No. CHS
1. Authorise relocation of affected tenants together with homeloss and Strategic disposal of 1 /2 bed tenement flats as part of Total - 4 disturbance payments. placed based approach to assist with consolidation of 112a - 112d Main Street, Newmilns Void - 3 Disposal 2. Authorise disposal of vacant properties tenement flats across the town and to generate Red/Amber - 4 demand. Apply estate agent approach to disposal. CHS - 0 1. Authorise relocation of affected tenants together with homeloss and Strategic disposal of 1 /2 bed tenement flats as part of Total - 4 disturbance payments. placed based approach to assist with consolidation of 55a - 55d High Street, Newmilns Void - 1 Disposal 2. Authorise disposal of vacant properties tenement flats across the town and to generate Red/Amber - 3 demand. Apply estate agent approach to disposal. 3. Athorise buy back and dispose as portfolio CHS - 1 4.Authorise buy back and demolish and clear site Block of flats containing 6 properties. Oversupply of this Total - 6 type of property and is hard to let when becomes 1. Authorise disposal of vacant properties now; 5B and 5D vacant. Phased approach to disposal. Apply estate agent 2. Authorise disposal of remaining properties as and when they become 5b - 5d & 9 Newton Terrace, Catrine Disposal approach to disposal. Void- 3 vacant
Red - 2 4 in a block 2 /3 bed flats, problems with surface water run-off, topography of site exacerbates drainage 1. Authorise relocation of affected tenants together with homeloss and Total - 16 problems and impacts on desirability of accommodation disturbance payments. 37 – 43, 45 – 51, 26 – 32 and 34 – 40 Void- 4 Demolish and Clear whilst also precluding applicants with H&D 2. Authorise buy-backs Campbell Street, Newmilns Red - 4 requirements. Low to non-existing demand, presently 4 3. Authorise demolish properties of the 4 in a block flats void. Red Status has increased CHS - 1 since 2017 4. Authorise groundworks to alleviate flooding issues. APPENDIX 5
OPTIONS APPRAISAL
ST. CUTHBERT’S STREET, CATRINE
BACKGROUND
1. In accordance with the Housing Asset Management Framework Report submitted to Cabinet on 29 November 2017, Members approved a Feasibility Study being carried out at St. Cuthbert Street in Catrine and engagement with local residents to develop an Options Appraisal Report for consideration.
2. The flats at St. Cuthbert’s Street are located within the Catrine Conservation area and are believed to date back to circa 1860. They were originally constructed as single storey dwellings before being renovated through the addition of a first storey and rear extension. It is not known when these renovations were completed. As a result of these renovations and the existing steep topography of the site, the first floor flats are accessed through a communal entry, which is shared with the ground floor flats, via an external staircase. The rear garden areas contain a series of substantial retaining walls and incorporate stepped access to the gardens.
3. The properties are situated at the foot of a steeply sloping hill and a footpath, known locally as the Radical Brae, which dissects the rear property gardens. In 2006, the Radical Brae was designated a local Nature Reserve.
4. The Council retains ownership of 21 flats, with 7 flats being privately owned, across 28 one and two bedroom terraced flats. Appendix 6 to the Report provides a breakdown of the property types and sizes, ownership, and occupancy status.
5. As detailed within the Housing Asset Management Framework Report submitted to Cabinet on 29 November 2017, the flats contained in St. Cuthbert Street have been categorised as having a Red Status, i.e. properties that are considered as being cause for concern with regard to their sustainability, lack of demand and high levels of void rent loss.
LEVEL OF DEMAND
6. The St. Cuthbert’s Street properties are contained within the St. Cuthbert’s Street letting area of Catrine. Demand for flats within St. Cuthbert’s Street fluctuates between low to non-existent. In general, demand for accommodation across Catrine is low. Table 1 provides details of applicants queuing for accommodation in Catrine by age and size of accommodation.
7. The Council, as strategic housing authority seeks to respond to housing need, as evidence in the Housing Need and Demand Assessment through the delivery of the Housing Asset Management Framework (HAMF) outcomes, as reported in the Strategic Housing Investment Plan and Housing Investment Programme 2019-2024 proposals. Improvement works being undertaken to the properties at St. Cuthbert Street in the sum of £1.393m would not align the HAMF outcomes as the properties are classed red and would continue to fail the SHQS, based on the agreed matrix. Moreover, the level of waiting list demand in Catrine for 1 and 2 beds is reported at 18, with 7 properties currently reported as being vacant, with the longest void period being over 3 years; the net effect of which is a void loss of £46,970 over 3 years as set out in Table 2.
8. Table 1: Demand
Applicants Calculated Bedroom Requirements Total by Age Band 1 Bed 2 Bed 3 Bed 4 Bed+ 16 - 54 13 5 4 7 29 55 - 59 2 2 60+ 13 1 14 Total 28 6 4 7 45
9. The void rent loss highlighted in Table 2 reflects the significant rent loss attributable to these properties over the last 3 years, with the average void period being 2/3 years.
10. Table 2: Rent loss 2015-2018
YEAR RENT LOSS(£) 2015/16 8,184.39 2016/17 16,609.06 2017/18 22,176.95 TOTAL 46,970.40
11. Of the 21 flats in Council ownership, 7 flats are currently vacant and there are no indications that demand for flatted accommodation within St. Cuthbert’s Street, or in the wider Catrine area, is likely to increase in the foreseeable future. Although demand reflects 18 people waiting for 1 or 2 bed flats, there may be exclusions within this group in terms of areas.
CONSULTATION
12. A Conversation Café was held locally on 3 May 2018. This consultation event was designed to inform the Council’s proposals to address both the identified problems associated with the stock’s condition and its ongoing sustainability. All residents living in St. Cuthbert’s Street were invited to seek their views on their preferred option for the future of the flats.
13. The event was attended by 20 people, of a possible 21 residents, consisting of 8 Council tenants, 5 private owners, and 1 tenant of a privately rented property. 6 other members of the local community also attended.
14. As part of the engagement and consultation process, residents were invited to complete a questionnaire covering five main topic areas. The areas covered in the questionnaire, and feedback received, are summarised in Table 3:
15. Table 3: Summary of feedback received
QUESTIONNAIRE FEEDBACK RECEIVED TOPIC Local environment The majority of residents feel the flats have a significant identity within the town in terms of place- making. Repairs and There is wide recognition that the properties require maintenance significant investment to be made. Ongoing repairs and maintenance issues are a concern. Of those surveyed, 12 residents described the external condition as being poor or very poor. Half of the residents also described the internal condition of their homes as being very poor Health and The majority of residents noted they did not believe wellbeing Their health or wellbeing was being adversely affected or impacted by their accommodation, and agreed with the statement: “St. Cuthbert’s Street is a good place to live”. Accessibility Access to rear gardens also featured prominently in the feedback received. 10 residents indicated they had difficulty gaining access to, or utilising, their gardens. Future housing The majority of residents who responded, 9, indicated aspirations they would be interested in moving to other properties, entering into excambions, or selling their homes; if provided with the opportunity and assistance, with 4 indicating they would prefer to remain living in their current homes.
PLACE-MAKING
16. In accordance with the East Ayrshire Local Development Plan 2017 and the Catrine Community Action Plan 2017-2022, the pre-production phase of the Catrine Place-making Action Program has recently been completed to identify initial ideas or opportunities for improvement within Catrine. Although the Place-making Plans are at the first stage of the consultation process, the Action Program has identified two keys elements:
A need and desire to protect and enhance buildings, ruins, or features of landscape, which are historically notable or significant within the local community and
To consider developing new build housing where the condition of existing properties leads to significant vacancies or has a negative visual impact.
17. Amongst the suggestions to protect and enhance the historic core of the town, proposals have included the development of a Heritage Project to enhance and promote the industrial heritage and archaeology of the Town.
FEASIBILTY: STOCK CONDITION AND REMEDIAL WORKS
18. The buildings in St. Cuthbert’s Street have been assessed as being in a structurally satisfactory condition. However, the external stairs, landings and retaining walls are showing signs of structural deterioration and wide-scale replacement is recommended. In addition, there are multiple building defects reported that are affecting the properties to include:
The deterioration of the external building fabric, e.g. loose and damaged render, defective stonework and brickwork to walls and chimneys, and significant defects to existing roof coverings. Dampness/ condensation problems affecting a number of ground and first floor flats. These problems consist of both penetrating and rising damp and are exacerbated by the age of the building, and its location relative to the Radical Brae.
19. The rear garden areas are situated on a steep slope and a majority of the gardens are not easily accessible. This topography has made it difficult for a number of residents to maintain and make effective use of their garden areas.
OPTIONS APPRAISAL
20. An Options Appraisal exercise undertaken of the St. Cuthbert’s Street has elicited a number of options for the properties. Indicative costs exercise have been prepared by Housing Asset Services and Facilities and Property Management, as set out in Appendix 7, summarised at Tables 4 and 5. Proposals have been made based on historic property sales at St. Cuthbert’s Street to inform buy-back values. A provisional sum has been budgeted to cover any associated decant costs.
21. Housing Asset Services have undertaken a preliminary costings exercise of the necessary remedial and improvement works required. The exercise has focused on the following improvement/ repair works:
Repairs or renewal of external stairs, landings and retaining walls External building fabric repairs Dampness works/ treatment to ground and first floor flats Kitchen and Bathroom upgrades and rewiring to Council-owned stock Renewal of gas central heating systems to Council-owned stock Redecoration of communal entries
22. The cost of full refurbishment of Council properties and common external elements is estimated to be £1.393m. This would be subject to agreement of adjoining owners. A breakdown of Costs for repairs to Council and Private Properties is highlighted in table 4. These repair works should allow the properties to meet the SHQS, however it should be noted that as the ground floor flats are mostly of sandstone construction that it will be difficult to get these properties to meet the thermal requirements of any future SHQS enhanced requirements. A further Hydrogeology report has been commissioned and may have associated costs for Council and Private properties.
23. Table 4 – repair costs
REPAIR COSTS Owners EAC properties properties TOTAL REPAIR COSTS 21 7 properties 28 1.0 Kitchen & Bathroom Replacements & Rewires (only EAC properties) £160,650.00 £160,650.00
2.0 Dampness & Rot Eradication Works (only to EAC properties) £308,045.00 £308,045.00 3.0 New Gas Central Heating (only to EAC properties) £47,250.00 £47,250.00 4.0 External Building Repair Works £221,366.25 £75,573.75 £296,940.00 5.0 Garden Repair Works £257,946.50 £85,851.50 £343,798.00 6.0 Close Entry Painting £3,150.00 £1,050.00 £4,200.00
Sub Totals £998,407.75 £162,475.25 £1,160,883.00 Contingencies 20% £199,681.55 £32,495.05 £232,176.60 Total for works cost £1,198,089.30 £194,970.30 £1,393,059.60 £27,852.90 Cost per property £57,051.87 (ex VAT)
24. The Council will commit to its share of cost to undertake the works required to Council owned stock as set out in paragraph 22, subject to all owners’ consent to pay their share of costs for the stock. Scheme of Assistance grant availability will be discussed with individual owners. Proposals are set out in Table 5.
25. Table 5 - Proposals
No. PROPOSALS £ (i) Subject to all owners’ consent £1.393m to pay their share of costs, all Per owner share £27,852.90 (ex improvement works to be VAT) carried out by the Council. (ii) Where unanimous agreement £56,000 is not reached, it is proposed to relocate Council tenants and (Home loss and Disturbance dispose of Council-owned payments: 14 x £1,750). Legal costs stock. for disposal 21 x £1,500 £31,500 (iii) Relocate Council tenants, £285,400 acquire ex-Council owned properties from owners and (£24,500 Home loss and market to dispose of all stock Disturbance payments EAC tenants: as a portfolio, or as individual 14 x £1,750). units. (Buybacks: 3 x £25K, 4 x £31K, + homeloss £19,900. legal costs for disposal £42,000 (iv) Relocate Council tenants. £24,500 Promote a Community Asset Transfer of Council-owned (£24,500 Home loss and stock. Disturbance payments EAC tenants: 14 x £1,750
26. Paragraph 36 of HAMF Report includes expenditure of £0.285m to cover the initial estimated costs of buybacks, home loss and disturbance payments.
27. Both Council tenants and owner occupiers would be entitled to Home Loss Payments in terms of sections 27-29 of the Land Compensation (Scotland) Act 1973, as amended. Council tenants that are relocated as a result of property disposals are also entitled to a disturbance payment.
28. Tenants being relocated from St. Cuthbert’s Street as a result of property disposals would be offered alternative accommodation to suit their individual circumstances and housing needs.
CONCLUSIONS
29. The flatted properties at St. Cuthbert’s Street, Catrine, present a significant challenge to the property owners individually, and to the Council as Strategic Housing Authority, due to the property condition and current desirability, together with their sense of place and status within the Catrine Conservation Area. Nevertheless, based on the outputs recorded in the stock condition reports and data collated in terms of demand, vacancies and void rent loss, the current position is unsustainable and action is required.
30. The relocation of Council tenants, the acquisition of the ex-Council owned properties and disposal of all stock at St Cuthbert’s Street, as a portfolio or as individual units, is proposed to best manage the ongoing and increasing costs to resolve the poor property condition at St Cuthbert’s Street for those residents living in the properties.
APPENDIX 6
ST. CUTHBERT’S STREET, CATRINE
PROPERTY TYPES, SIZES, OWNERSHIP AND OCCUPANCY
Tenement Housing Stock - St. Cuthbert Street, Catrine Block Occupancy Address Flat Nr Property Type Bedrooms Ownership Status 27A-D 27A Ground floor flat 1 EAC Occupied 27B 1st floor flat 1 Private N/A 27C Ground floor flat 1 EAC Void 27D 1st floor flat 1 Private N/A
28A-D 28A Ground floor flat 1 EAC Void 28B 1st floor flat 1 EAC Void 28C Ground floor flat 1 EAC Void 28D 1st floor flat 1 Private N/A
29A-D 29A Ground floor flat 1 EAC Void 29B 1st floor flat 1 EAC Occupied 29C Ground floor flat 1 EAC Occupied 29D 1st floor flat 1 EAC Occupied
30A-D 30A Ground floor flat 1 EAC Occupied 30B 1st floor flat 1 EAC Occupied 30C Ground floor flat 1 EAC Void 30D 1st floor flat 1 EAC Occupied
31A-D 31A Ground floor flat 2 Private N/A 31B 1st floor flat 2 EAC Occupied 31C Ground floor flat 2 EAC Occupied 31D 1st floor flat 2 EAC Occupied
32A-D 32A Ground floor flat 2 EAC Void 32B 1st floor flat 2 Private N/A 32C Ground floor flat 2 EAC Occupied 32D 1st floor flat 2 EAC Occupied
33A-D 33A Ground floor flat 2 Private N/A 33B 1st floor flat 2 EAC Occupied 33C Ground floor flat 2 Private N/A 33D 1st floor flat 2 EAC Occupied
APPENDIX 7
ST. CUTHBERT’S STREET, CATRINE
OPTIONS APPRAISAL: INDICATIVE COSTS
No. OPTIONS PROPOSAL IMPLICATIONS INDICATIVE COSTS (£) (i) Subject to all Subject to all owners’ consent to 1. This option requires £1.393m owners’ pay their share of costs, all unanimous consent of all owners Per owner share consent to pay improvement works to be carried to pay their share of costs to £27,852.90 (ex VAT) their share of out by the Council as set out in proceed. costs, all paragraph 21. improvement works to be carried out by the Council. (ii) Relocate Council tenants rehoused via the No cost expended on £56,000 Council Strategic Needs Group, with improvement/ repair works by tenants and associated Home loss and Council. Addresses void rent loss (Home loss and dispose of Disturbance payments. accrual. Owners would face Disturbance payments: 14 Council-owned Vacant properties marketed for significant costs associated with x £1,750). Legal costs for stock. sale. Scope to engage with local repairs/ improvement works. disposal 21 x £1,500 Community in support of Place- Indicative improvement costs are £31,500 making. likely to exceed current property Explore opportunity to utilise a market values. The sale of flats property for future Heritage may be an unattractive Project. proposition. (iii) Relocate Council tenants rehoused via the No cost expended on £285,400 Council Strategic Needs Group, with improvement/ repair works by tenants, acquire ex- associated Home loss and Council or owners. Addresses (£24,500 Home loss and Council owned Disturbance payments. void rent loss accrual. Disturbance payments properties from Scope to lease/ dispose of Flexible marketing potential as EAC tenants: 14 x £1,750). owners and property to progress creation of portfolio/ individual units. (Buybacks: 3 x £25K, 4 x market to Heritage Project. Potentially enhance interest in £31K, + homeloss dispose of all Buyback ex-Council stock from redevelopment. Limited demand £19,900. legal costs for stock as a owners. Market properties for accommodation within St. disposal £42,000 portfolio, or as individually/ as a portfolio. Cuthbert’s Street and Catrine individual units. (iv) Relocate Community Asset Transfer (CAT). Levels of repair/ improvement £24,500 Council required, along with indicative tenants. costs, likely to make CAT option (£24,500 Home loss and Promote a economically unviable. Disturbance payments Community EAC tenants: 14 x £1,750 Asset Transfer of Council- owned stock.