Agenda item

This report seeks approval for the use of Compulsory Purchase Order powers as necessary in order to progress the South Kilburn Regeneration Programme. Such powers would be used in the event of a failure to reach the preferred option of a negotiated settlement.

Cabinet RESOLVED:

(1)      To authorise the use of CPO powers for the Scheme and delegate authority to the Strategic Director of Regeneration and Environment, in consultation with the Lead Member for Regeneration, Property and Planning to proceed with the making and implementation of a CPO for each phase of the Scheme as necessary.  The proposed order lands were indicatively shown in the plan attached as Appendix 1 to the report.

(2)      To delegate authority to the Strategic Director of Regeneration & Environment, in consultation with the Lead Member for Regeneration, Property and Planning to agree the terms and enter into contract for the leasehold interest at Blue Box Storage, Exeter Court, Granville Road, London NW6 5AJ.  The estimated compensation settlement had been detailed in Appendix 2 of the report (containing exempt information).

(3)      To authorise the purchase of leasehold interests required for the Scheme by private treaty and delegate authority to the Strategic Director of Regeneration & Environment, in consultation with the Lead Member for Regeneration, Property and Planning to agree the terms and enter into contracts.

(4)      To note that the Council would remain sensitive to the needs of leaseholders affected by the impact of the Coronavirus pandemic and would engage in early dialogue and provide support for relocation to mitigate the impact.

(5)         To authorise officers to take all necessary steps to commence the process for the making, confirmation and implementation of a CPO for each phase, including securing the appointment of suitable external advisors and preparing all necessary CPO documentation under delegated authority as set out in (2) above.  Cabinet noted the key steps to make a CPO had been set out in paragraph 3.13 of the report.  Cabinet also noted that Appendix 3 of the report set out the policy in relation to displaced tenants and leaseholders in regeneration schemes, which aimed to maximise choice and secure a better match with individual circumstances, such as shared ownership and shared equity options and reversion to tenancy for vulnerable leaseholders.

(6)      To agree the detail of the following two additional measures to aid leaseholder acquisitions.  Both measures would allow officers to further assist resident leaseholders who met the criteria:

(a)      Shared Equity/Ownership:  The Council would seek to acquire a number of properties from the local market and offer these as shared equity or shared ownership homes to eligible resident leaseholders.  The way the shared equity product would work would be as follows.  The Council would purchase a property from the local market that met the needs of the resident leaseholder.  At the same time, the Council would purchase the resident leaseholder’s property in a back-to-back transaction.  The resident leaseholder would use funds made available from the buyback to purchase a percentage of the equity in the replacement property.  Any value gap (typically 25% to 50%), would be met by the Council, and the Council’s stake in the property was entered as a charge against the property.  The resident leaseholder would not pay a rent on the equity they did not own and would be able to purchase the share they did not own in accordance with the shared equity agreement (known as staircasing) as detailed in paragraph 3.18 of the report.   Any shared ownership scheme, if available, would be a part buy part rent scheme.

Cabinet agreed to delegate approval for each shared equity/ownership contract on a case-by-case basis to the Strategic Director for Regeneration and Environment in consultation with the Director of Finance.

(b)        Council tenancy: In exceptional circumstances, where assessment by a financial advisor indicates reduced financial security and supported by the criteria detailed in section 3.19 of the report, the Council could offer the leaseholder a council tenancy as part of the acquisition of their existing leasehold property at a reduced market value.

Cabinet agreed to delegate approval for each case to the Strategic Director for Regeneration and Environment in consultation with the Strategic Director of Community and Wellbeing.

The Lead Member for Regeneration, Property and Planning, Councillor Tatler, introduced the report seeking approval for the authorisation of Compulsory Purchase Order (CPO) powers for use in the South Kilburn Regeneration Programme.  Cabinet noted that CPO’s would only be used as a last resort when it had not been possible for the Council to reach a negotiated settlement, which was the preferred option, for the purchase of outstanding leasehold interests and would follow extensive engagement and the offer of a full package of compensation, as detailed in the Tenant and Leaseholder Policy set out in Appendix 3 of the report. It was noted that the last leaseholder purchase had recently been agreed for Hereford and Exeter estates via mutual agreement, with only one commercial interest remaining outstanding.

In expressing their support for the proposal, Cabinet highlighted that residents had expressed their desire for the scheme to progress as quickly as possible and noted the significant progress made with the overall regeneration scheme since the outcome of the residents’ ballot in autumn 2019. Whilst noting that approval of the recommendations would highlight the ongoing commitment to delivery of the Scheme, providing for use of CPOs if absolutely necessary, Members further welcomed the clarity provided in the report that CPO’s were intended to be used as a last resort, with the Council having a very good record in acquiring leasehold interests by negotiated agreement for the Scheme without the use of a CPO. 

RESOLVED that Cabinet:

(1)      Authorise the use of CPO powers for the Scheme and delegate authority to the Strategic Director of Regeneration and Environment, in consultation with the Lead Member for Regeneration, Property and Planning to proceed with the making and implementation of a CPO for each phase of the Scheme as necessary.  The proposed order lands were indicatively shown in the plan attached as Appendix 1 to the report.

(2)      Delegate authority to the Strategic Director of Regeneration & Environment, in consultation with the Lead Member for Regeneration, Property and Planning to agree the terms and enter into contract for the leasehold interest at Blue Box Storage, Exeter Court, Granville Road, London NW6 5AJ.  Members noted the estimated compensation settlement had been detailed in Appendix 2 of the report (containing exempt information).

(3)      Authorise the purchase of leasehold interests required for the Scheme by private treaty and delegate authority to the Strategic Director of Regeneration & Environment, in consultation with the Lead Member for Regeneration, Property and Planning to agree the terms and enter into contracts.

(4)      Note that the Council would remain sensitive to the needs of leaseholders affected by the impact of the Coronavirus pandemic and would engage in early dialogue and provide support for relocation to mitigate the impact.

(5)         Authorise officers to take all necessary steps to commence the process for the making, confirmation and implementation of a CPO for each phase, including securing the appointment of suitable external advisors and preparing all necessary CPO documentation under delegated authority as set out in (2) above.  Cabinet noted the key steps to make a CPO had been set out in paragraph 3.13 of the report.  Cabinet also noted that Appendix 3 of the report set out the policy in relation to displaced tenants and leaseholders in regeneration schemes, which aimed to maximise choice and secure a better match with individual circumstances, such as shared ownership and shared equity options and reversion to tenancy for vulnerable leaseholders.

(6)      Agree the detail of the following two additional measures to aid leaseholder acquisitions.  Both measures would allow officers to further assist resident leaseholders who met the criteria:

(a)      Shared Equity/Ownership:  The Council would seek to acquire a number of properties from the local market and offer these as shared equity or shared ownership homes to eligible resident leaseholders.  The way the shared equity product would work would be as follows.  The Council would purchase a property from the local market that met the needs of the resident leaseholder.  At the same time, the Council would purchase the resident leaseholder’s property in a back-to-back transaction.  The resident leaseholder would use funds made available from the buyback to purchase a percentage of the equity in the replacement property.  Any value gap (typically 25% to 50%), would be met by the Council, and the Council’s stake in the property was entered as a charge against the property.  The resident leaseholder would not pay a rent on the equity they did not own and would be able to purchase the share they did not own in accordance with the shared equity agreement (known as staircasing) as detailed in paragraph 3.18 of the report.   Any shared ownership scheme, if available, would be a part buy part rent scheme.

Cabinet agreed to delegate approval for each shared equity/ownership contract on a case-by-case basis to the Strategic Director for Regeneration and Environment in consultation with the Director of Finance.

(b)        Council tenancy: In exceptional circumstances, where assessment by a financial advisor indicates reduced financial security and supported by the criteria detailed in section 3.19 of the report, the Council could offer the leaseholder a council tenancy as part of the acquisition of their existing leasehold property at a reduced market value.

Cabinet agreed to delegate approval for each case to the Strategic Director for Regeneration and Environment in consultation with the Strategic Director of Community and Wellbeing.