After reading this blog, I asked City of Edinburgh Council if it could relieve some of the demand for affordable rented accommodation by systematically buying back former “council houses” as they came on the market. The response I received is below – I am quite keen to seek an opportunity to develop a formal business case on this.
The Council’s acquisitions and disposals policy was developed to address the significant challenges of mixed tenure management and investment in improving homes where the Council is the minority owner. The project involves buying homes where the purchase results in the Council achieving full, or majority, ownership. These purchases are funded by the sale of homes in blocks where the Council is the minority owner and there is no long term benefit of investment in these homes.
The approach seeks to ensure that the Council achieves an overall balance in the acquisition and disposal of new homes, but there is also a connection to the potential to increase the overall supply.
Assessing the financial value of the acquisitions approach is not straightforward, particularly given the buoyancy of Edinburgh’s housing market. The majority of homes purchased have been those previously sold to sitting tenants under former right to buy legislation. The cost of purchase can vary considerably, depending on the size, quality (i.e. how much investment the owner has put in to maintain their home) and location of the homes. The Council often has to invest significantly in the homes to bring them up to the required lettable standard for social rented homes. In some instances, the purchase and repairs cost have amounted to less than the average cost of a new-build, however this is not always the case.
The future demand and management implications of the purchase of homes also needs to be considered as part of the overall assessment, however, the primary aim is to facilitate our ability to carry out repair and maintenance works for years to come.