North Yorkshire Council
Executive
16 December 2025
Acquisition of properties in various localities for use as affordable homes to go into the Housing Revenue Account
Report of the Corporate Director Community Development
1.0 PURPOSE OF REPORT
1.1 The purpose of this report is to seek Council approval to acquire 10 new build properties at two separate locations in Ripon and Bedale. These properties will be acquired for both Shared Ownership and social rented accommodation, which will be taken into the Housing Revenue Account.
2.0 BACKGROUND
2.1 In January 2023, the Council approved the Housing Revenue Account (HRA) Medium term plan, which includes the delivery of 500 new homes over the next 5 years to 2029. These homes will be rented homes, which will address local housing needs across North Yorkshire and be rented out to local households in housing need.
2.2 There are high housing needs in both Ripon and Bedale, with over 2000 households within the respective legacy districts on North Yorkshire Homechoice requiring accommodation across both localities.
2.3 This report seeks approval to acquire a total of 10 new build homes across Ripon and Bedale. Of these, 6 new build homes will be acquired from a developer in Bedale to provide a mix of 5 general needs, 3 bedroom social rented homes for households in housing need and 1 shared ownership 4 bedroom property, and to acquire 4 new build 3 bed homes from a developer in Ripon, of which all homes will be for Shared ownership.
3.0 PROPOSAL
3.1 The Council has been in negotiations with separate developers who are building new housing in both Ripon and Bedale to acquire suitable homes that can be managed through the HRA.
3.2 All of the homes will meet Nationally Described Space Standards (NDSS), and are to a specification, which meets the Council’s requirements. In addition, the properties will meet EPC “B”, which is also in line with the Council’s requirements for all our new build properties to attain a minimum of EPC “C” and will be built to Future Homes Standards.
3.3 The social rented properties will be allocated to households in need through the Council’s allocations scheme and in accordance with the allocations policy. The Shared Ownership properties will be for households who are unable to afford to purchase properties on the open market, providing that they meet the standard eligibility criteria for shared ownership homes.
3.4 The total cost of acquiring all 10 properties across the two locations will be circa £2.53 million. The costs for both the Ripon and Bedale properties will be met by a combination of loan, HRA capital, Homes England Grant funding and sales receipts from the shared ownership properties. Due to the presence of Homes England Grant funding the council will be SLDT exempt on these purchases.
4.0 CONSULTATION UNDERTAKEN AND RESPONSES
4.1 Consultation has been undertaken with the respective local members in each of the locations, who are both supportive of the acquisitions. Consultation has also been undertaken with both the Council’s Housing Needs service and the Council’s Housing Landlord service, who are also both supportive of the acquisitions.
4.2 Consultation has also taken place with Homes England in respect of funding to support the acquisition of the properties.
5.0 CONTRIBUTION TO COUNCIL PRIORITIES
5.1 The scheme contributes principally to the following Council priority:
“Place and Environment: Good quality, affordable and sustainable housing that meets the needs of our communities”
6.0 ALTERNATIVE OPTIONS CONSIDERED
6.1 The acquisition of “off the shelf” properties from developers forms an important part of the Councils plans for both delivering the HRA Business Plan to provide 500 new Council homes. The acquisition of these properties forms quick wins for the Council, and there were no other viable options for acquisition of new properties available to the Council at the present time.
7.0 IMPACT ON OTHER SERVICES/ORGANISATIONS
7.1 The key services which will be impacted by this proposal will be other service areas within the wider Housing service, and in particular, the Housing Landlord service who will manage the properties and the Homes and Places service, who will be responsible for maintaining the properties
8.0 FINANCIAL IMPLICATIONS
8.1 The total cost of purchasing all the 10 homes across the two locations amounts to £2,571,200, including all associated on costs.
8.2 CAPITAL FUNDING:
The property acquisition has been appraised using the standard HRA model and will be funded by a mix of borrowing, shared ownership receipts, Homes England funding and HRA reserves. The receipts from the sales of the shared ownership properties have been based on an assumption of an average of a 40% share of the purchase price at initial sale.
..
|
Capital Funding |
£ |
|
Homes England funding |
800,000 |
|
Borrowing |
936,200 |
|
HRA Reserves |
200,000 |
|
Shared Ownership sales at 40% of property purchase price |
635,000 |
|
Total Funding |
2,571,200 |
PERFORMANCE OUTPUT
|
|
Output |
Benchmark |
Test |
Pass/Fail |
|
40 Year Net Present Value (£) |
1,896.34 |
0 |
Output>Benchmark |
PASS |
|
60 Year Net Present Value (£) |
280,702.59 |
0 |
Output>Benchmark |
PASS |
|
Payback Year |
40 |
40 |
Output<Benchmark |
PASS |
|
40 Year IRR% |
6.30% |
6.29% |
Output>Benchmark |
PASS |
8.3 REVENUE IMPLICATIONS:
The rents for the rented properties will be set at social rent. The rental income from the unsold share of the shared ownership properties is set at 2.75% of the unsold share, which will be increased annually on the basis of Consumer Price Index (CPI) plus 0.5%.
9.0 LEGAL IMPLICATIONS
9.1 Under the Council’s Property Procedure Rules, as the capital cost of acquiring these properties exceeds £1million the decision to acquire them must be approved by the Executive.
9.2 The Council will also need to undertake the standard legal processes required in the acquisition of the properties and the Council’s in-house legal team have been appointed to undertake this work on our behalf.
9.3 The Council would normally be liable for Stamp Duty Land Tax (SDLT) on acquisitions of this nature, however exemptions are available for these purchases as they are partially funded by a public subsidy under Section 71 Finance Act 2003.
9.4 The Council has previously taken advice from external solicitors, which has established that the Council can claim an exemption to SDLT based on the following grounds:
Section 71(1) FA 2003 makes provision for an exemption from SDLT for the purchase by "a relevant housing provider" if the transaction is "funded with the assistance of a public subsidy".
Both acquisitions will utilise an element of Homes England Grant as part of the funding package, which will meet this specific requirement.
10.0 EQUALITIES IMPLICATIONS
10.1 An Equalities Impact Assessment screening has been undertaken, which highlighted that there would be no adverse impacts, and a full Equalities Impact Assessment would not be required. The proposal would have positive impacts, particularly for persons on low income in need of affordable housing. See Appendix B.
11.0 CLIMATE CHANGE IMPLICATIONS
11.1 An initial Climate Change Impact Assessment has been undertaken, which highlighted that there would be no adverse impacts, and a full Climate Change impact Assessment would not be required. See Appendix C.
12.0 PERFORMANCE IMPLICATIONS
12.1 The acquisition of the properties contributes to our overall target of the provision of 500 new homes into the HRA
13.0 RISK MANAGEMENT IMPLICATIONS
13.1 The key risks with the scheme are as follows:
|
Risk |
Potential Impact |
Mitigation |
|
The properties are delayed in being completed |
Would mean occupation of the properties would be delayed |
The properties on both sites are due to be completed imminently |
|
Properties do not meet required standards |
Would result in increased costs to bring properties to required standards |
Have selected properties that meet NDSS. Have also confirmed that specification provided by the developer meets required standards, and this will be included in purchase agreement.
|
|
Problems with ASB and difficulties in managing and maintaining properties due to being remote from current managed areas |
Could result in local community concerns and cause reputational damage to the Council.
Could lead to increased costs in putting in increased resources to manage and maintain properties. |
We have recently put in new measures for the management and maintenance of new Council properties in non-stockholding locations, which would minimise the risk.
|
14.0 REASONS FOR RECOMMENDATIONS
14.1 The reason for the recommendation is to provide 10 properties of new affordable housing in Ripon and Bedale, which will meet the requirements of the HRA Business Plan for the development of a minimum of 500 new Council homes across North Yorkshire.
|
15.0 |
RECOMMENDATION(S)
|
|
15.1 |
That the Executive approves of the acquisition of 10 newbuild homes, with 4 new build properties in Ripon, all 4 homes for use as shared ownership and 6 newbuild homes in Bedale, 1 of which are for Shared Ownership and the remaining 5 for social rent. All homes will be taken into the HRA, on terms to be agreed in accordance with this report and as agreed by the Corporate Director for Resources. |
|
|
|
APPENDICES:
Appendix A – Confidential Appendix
Appendix B – Equality Impact Assessment
Appendix C – Climate Change Impact Assessment
BACKGROUND DOCUMENTS: None
Nic Harne
Corporate Director – (Community Development)
County Hall
Northallerton
16th December 2025
Report Author – John Burroughs: Housing Delivery Manager
Presenter of Report – John Burroughs: Housing Delivery Manager
Note: Members are invited to contact the author in advance of the meeting with any detailed queries or questions.