Agenda item

Report of the Corporate Director of Regeneration and Economic Development – presented by the Strategic Manager for Housing and the Development Manager, Regeneration and Economic Development.

The Chairman introduced the Development Manager, Regeneration and Economic Development and Chief Executive of Chapter Homes, Peter Coe who was in attendance to give a presentation as regards Chapter Homes (for copy see file of minutes).

The Development Manager reminded Members as regards the background to the development of Chapter Homes with Cabinet, in December 2013, having agreed to explore the formation of a new company dedicated to the development and management of housing for market rent and sale.  It was added a subsequent report in terms of the procurement process had been received by Cabinet in November 2014.  Members recalled that delegated authority was granted to the Corporate Director of Regeneration and Economic Development and Corporate Director: Resources, in consultation with the relevant Portfolio Holders in terms of proceeding to the stage of appointing a building contractor.  Members noted that Chapter Homes represented an opportunity to provide quality products and good service while also offering good value for money in terms of Council assets. 

Members noted that the in January 2014, technical agents were engaged and structures put in place, and that in January 2016 contractors, Gentoo Construction, entered into a Pre-Commencement Services Agreement and now were on site at the pilot site, Agnew 5. 

It was explained that the developments sites had been identified as being in areas with demand and also ready for immediate development, being: Agnew 5, Woodham Drive, Newton Aycliffe; Cobblers Hall Site N, Newton Aycliffe; Former Civic Centre site, Chester-le-Street; and Oakerside Drive, Peterlee.

The Development Manager added that following a branding exercise, the name of Chapter Homes had been decided upon, making reference to the links to Durham City and the Cathedral, with a selection of the branded materials set out in the Durham Room for Members to view after the meeting.

Members learned that the first properties at the Agnew 5 site were now out of the ground and over the next few weeks a marketing suite would be prepared.  It was explained that there was a mix of property types, with 3 and 4 bedrooms, noting there had been no demand for 2 bedroom properties. 

It was added that Officers had looked at products to help people enter the housing market, and had looked at issues including affordable housing.  Councillors noted the new company was a Limited Company, wholly owned by the County Council and there were Service Level Agreements (SLAs) in place to ensure transparency.  It was explained that in terms of affordable housing, Chapter Homes would look to transfer any required affordable rent properties to a Registered Provider (RP), and those properties identified for discount market sale would be sold directly on the open market.  The Development Manager explained that the business plan took into account issues in terms of “state aid” and the viability was based upon an average of 2 sales per month for the Agnew 5 site, to be known as “Eden Field”.  Members noted that the Chapter Homes Board consisted of Members and Officers from Durham County Council, however they worked separately in operational terms.

The Development Manager explained that the Eden Field development was on track, with over 100 queries via Rightmove, translating to 10% of those expressing an interest.  It was added that there was “help-to-buy” and also the Chapter Homes Assisted Move, offering incentives.  Members noted the development would be in two phases and that one property had already sold off-plan, with the purchaser having paid a deposit and been involved in final design choices.

In terms of the Chester-le-Street site, it was explained that masterplanning and site design were being undertaken, with planning permission being sought in October 2016 and soft market testing having been carried out to determine demand.  The Development Manager explained that Chapter Homes aimed to deliver around 30% of properties for private rent and had a SLA in place with the Council’s Housing Solutions Service in terms of letting the properties.  It was explained that there had been 13 expressions of interest.  It was added that properties would be for rental between £550 and £650 per month and that rent-to-buy could be looked at should there be a demand.

The Committee noted that statistics showed that around 50% of those expressing an interest did not have a property to sell and the majority were local people, interest being driven by word of mouth.  It was added that marketing activities would be via the internet, Rightmove and social media, including Twitter.  The Development Manager noted that there would be open days at the Eden Field on 20 and 21 August, between 10.00am and 4.00pm, with the Sales Office being open from 15 August onwards.

Members noted that there had also been: a schools competition in terms of the hording around the site; a Section 106 agreement as regards a play area; apprenticeships via Gentoo; Health and Safety awareness via the local College; and Gentoo helping the local Community Centre in terms of an extension and other works.  The Development Manager noted there had been two minor complaints, one resident in terms of work traffic, dust and another in terms of traffic management issues, however no major issues.

The Chairman thanked the Development Manager and asked Members for their questions on the update report.

Councillor J Armstrong asked as regards the marketing of the properties and highlighting how environmentally friendly the new properties were.  The Development Manager explained the properties were competitive in terms of their green credentials, however, as the properties were being marketed as affordable, then the properties were as green as possible at that price.  It was added that if a person was interested in adding more to a property, for example photovoltaic cells on a roof, then this could be accommodated as could a higher internal specification with customer choice being pushed as a part of the offer.

Councillor J Maitland noted there would be nearly 300 properties across 4 sites and asked whether they all would be 3-4 bedroom properties, or would there be provision of bungalows for example.  The Development Manager explained in terms of the Eden Field site there had been no demand for bungalows, with no requests being made, although the original designs did include some bungalows.  It was added that if when looking at demand for the Chester-le-Street site there was interest in bungalows, and it would be viable, then this would be taken into account.

Councillor M Davinson asked how the balance was achieved between regeneration of an area and profit.  The Development Manager noted that Chapter Homes was already looking at the more marginal areas, though making sure schemes would be viable financially, and it was added that the developments would look to cross-subsidise other sites.

Mr T Batson welcomed the development of new housing and asked as regards new houses for more rural areas.  The Development Manager explained that the 4 sites had been chosen from Council owned land surplus to requirements, and currently there were no sites in rural areas earmarked.  It was added that if a site was identified as viable then it could be looked at accordingly.

Councillor D Hall asked if there were any further potential sites identified and how issues of quality would be addressed, for example good room sizes, low levels of snagging and so on.  The Development Manager noted that the process in terms of developer had been via competitive tender and Gentoo were aware of the quality required and the contact was performance related.  It was added that there was the ability for Chapter Homes to review arrangements for subsequent phases of development should there be an issue with quality identified.  The Development Manager noted that there were no further sites at this time and that certainty in terms of sales of the current sites was the priority.

Councillor E Adam asked as regards the rental properties, with 8 being for Livin and other properties being let via the Council’s Housing Solutions.  The Development Manager noted that the 8 properties in terms of the Section 106 Agreement would be transferred to Livin as their stock, they having submitted the strongest bid in this regard. 

Members were reminded that the 30% to be “privately rented” by Chapter Homes were those marketed by Housing Solutions in line with the SLA in place.  Councillor E Adam asked if there was an SLA in place with Livin in terms of those properties, with the Development Manager explaining the properties were transferred, and therefore the responsibility of Livin.  Councillor E Adam noted that there was a potential issue in terms of ongoing maintenance for those properties, with that the quality of the properties would be important if associated with Chapter Homes.  The Development Manager noted the comments made by Councillor E Adam in this regard.

Resolved:       

(i)              That the report on progress be noted.

(ii)             That the Economy and Enterprise Overview and Scrutiny Committee receive a further update on the progress of Chapter Homes at a future meeting.