The Executive Director (Development) submits a report to Cabinet which seeks approval of the acquisition of properties at Barton Park by the Council, including properties currently owned by Oxford City Housing (Investment) Limited, to be held in the Housing Revenue Account (HRA), recommending to Council an in-year budget change to the HRA Capital Budget and associated changes to the HRA Business Plan to fund and operationalise this.

Cabinet is recommended to:

1.    Subject to approval of the budget allocation by Council, agree that:

a.    the Council take a transfer of the 168 residential units from OCH(I)L at Barton Park into the HRA;

b.    That the Council acquire the remaining 184 units at Barton Park that units directly from the developer Barton (Oxford) LLP and retain them in the HRA;

2.    Note the single member decision of Councillor Linda Smith, dated 19 September 2024, to approve acquisition from the developer into the HRA of the 10 units OCH(I)L were due to acquire between September and 26th November 2024, (included in the 184 homes above);

3.    Subject to budget allocation by Council, to delegate authority to the Executive Director (Development), in consultation with the Executive Director (Communities and People); the Cabinet Member for Housing and Communities; the Cabinet Member for Finance and Asset Management; the Cabinet Member for Citizen Focused Services and Council Companies; the Head of Financial Services/Section 151 Officer and the Council’s Monitoring Officer, to:

a.    agree the terms of the acquisition, of both the freehold and leasehold interests of the 168 units held by OCH(I)L and any associated land using the valuation approach as set out in Appendix 5;

b.    agree to the purchase of the remaining 184 Social Rented properties and any associated land from Barton Park in accordance with the agreement with Barton Oxford LLP and Oxford City Council dated December 2014;

c.     enter into all agreements necessary, where delegation does not already exist, to facilitate the transfer of the properties at i and ii above, including but not limited to, any documentation necessary to transfer the benefit of any continuing warranties and guarantees relating to the properties to the Council; and

4.    Recommend to Council to:

a.    approve a capital budget of £39,732,981 in accordance with the table at para 27, to finance the acquisition of all the Barton properties from OCH(I)L into the HRA (168 units at a cost of £33,375,324), plus a further 29 additional units directly from the developers at a total cost of £6,357,657, funded predominantly from additional borrowing. This additional spend to be profiled into the 2024/25 financial year. The expenditure incurred in respect of the 10 units as per the Single Member decision (Noted in 2 above) will then be transferred and allocated to this new budget;

b.    approve a further revision to the HRA capital budget of £33,359,780 profiled into years 2025/26, 2026/27 & 2027/28, to provide for the retention of the further Social Rent homes from the developer at Barton Park funded predominantly from additional borrowing;

c.     note that the budget for loans to Oxford City Housing Limited (OCHL) for the future purchases of Barton properties included within the Council’s capital programme and HRA income and expenditure for the properties purchased will also be adjusted as necessary to reflect the new ownership. These properties are listed in Appendices 1 and 2, and 3;

d.    note that the total additional borrowing required by the HRA may be lower if other funding is able to be used (for example Retained Right to Buy Receipts) or the council chooses to utilise the option within the agreement with the Limited Liability Partnership (LLP) to sell up to 100 of the homes acquired from Barton Park to a third party Registered Provider. Either of these options would be subject to another Cabinet Decision; and

e.    note that in recognition of the volatility of the housing market and, therefore, that there may be an increase in costs of acquisitions in future years that the Head of Financial Services (Section 151 Officer) may alter the budgets for the above acquisitions at ii so as to increase it provided that such increase is possible within the envelope of the approved HRA capital budget at that point in time and such changes being reported to Council in the quarterly budget reporting / budget update.

The Executive Director (Development) submitted a report to Cabinet which sought approval of the acquisition of properties at Barton Park by the Council, including properties currently owned by Oxford City Housing (Investment) Limited, to be held in the Housing Revenue Account (HRA), recommending to Council an in-year budget change to the HRA Capital Budget and associated changes to the HRA Business Plan to fund and operationalise this.

Councillor Turner presented the report. He stated that they have units of social housing and that in the current plan they will be acquired by the investment arm of the Council’s housing investment company. However, since that plan was developed the landscape has changed, in particular with matters such as interest rates. Due to the changes seen in interest rates, it is now more advantageous for the Council to hold the units through its HRA than through its housing investment company. For these reasons, he commended the recommendations.

Councillor Upton noted that this report provides fantastic news and that they will have another 350 social houses for the people of Oxford. She said that this is a great piece of work, accomplished jointly between the Council and the developer.

Cabinet agreed to:

1.    Subject to approval of the budget allocation by Council, agree that:

a.    the Council take a transfer of the 168 residential units from OCH(I)L at Barton Park into the HRA;

b.    That the Council acquire the remaining 184 units at Barton Park that units directly from the developer Barton (Oxford) LLP and retain them in the HRA;

2.    Note the single member decision of Councillor Linda Smith, dated 19 September 2024, to approve acquisition from the developer into the HRA of the 10 units OCH(I)L were due to acquire between September and 26th November 2024, (included in the 184 homes above);

3.    Subject to budget allocation by Council, to delegate authority to the Executive Director (Development), in consultation with the Executive Director (Communities and People); the Cabinet Member for Housing and Communities; the Cabinet Member for Finance and Asset Management; the Cabinet Member for Citizen Focused Services and Council Companies; the Head of Financial Services/Section 151 Officer and the Council’s Monitoring Officer, to:

a.    agree the terms of the acquisition, of both the freehold and leasehold interests of the 168 units held by OCH(I)L and any associated land using the valuation approach as set out in Appendix 5;

b.    agree to the purchase of the remaining 184 Social Rented properties and any associated land from Barton Park in accordance with the agreement with Barton Oxford LLP and Oxford City Council dated December 2014;

c.     enter into all agreements necessary, where delegation does not already exist, to facilitate the transfer of the properties at i and ii above, including but not limited to, any documentation necessary to transfer the benefit of any continuing warranties and guarantees relating to the properties to the Council; and

4.    Recommend to Council to:

a.    approve a capital budget of £39,732,981 in accordance with the table at para 27, to finance the acquisition of all the Barton properties from OCH(I)L into the HRA (168 units at a cost of £33,375,324), plus a further 29 additional units directly from the developers at a total cost of £6,357,657, funded predominantly from additional borrowing. This additional spend to be profiled into the 2024/25 financial year. The expenditure incurred in respect of the 10 units as per the Single Member decision (Noted in 2 above) will then be transferred and allocated to this new budget;

b.    approve a further revision to the HRA capital budget of £33,359,780 profiled into years 2025/26, 2026/27 & 2027/28, to provide for the retention of the further Social Rent homes from the developer at Barton Park funded predominantly from additional borrowing;

c.     note that the budget for loans to Oxford City Housing Limited (OCHL) for the future purchases of Barton properties included within the Council’s capital programme and HRA income and expenditure for the properties purchased will also be adjusted as necessary to reflect the new ownership. These properties are listed in Appendices 1 and 2, and 3;

d.    note that the total additional borrowing required by the HRA may be lower if other funding is able to be used (for example Retained Right to Buy Receipts) or the council chooses to utilise the option within the agreement with the Limited Liability Partnership (LLP) to sell up to 100 of the homes acquired from Barton Park to a third party Registered Provider. Either of these options would be subject to another Cabinet Decision; and

e.    note that in recognition of the volatility of the housing market and, therefore, that there may be an increase in costs of acquisitions in future years that the Head of Financial Services (Section 151 Officer) may alter the budgets for the above acquisitions at ii so as to increase it provided that such increase is possible within the envelope of the approved HRA capital budget at that point in time and such changes being reported to Council in the quarterly budget reporting / budget update.