Housing Revenue Account Asset Disposal Policy

This policy supports the Council Strategy and Housing Strategy, including the commitment to providing high quality council homes and landlord services. The disposal of surplus HRA assets will raise capital receipts and enable the delivery of high quality council housing. The HRA Asset Disposal Policy also aligns with the following plans:

• Council Strategy
• HRA Business Plan
• Asset Management Plan
• Affordable Housing Development Programme
• Housing Strategy

The purpose of the HRA Asset Disposal Policy is to:

• Facilitate the disposal of assets that are no longer meeting service need.
• Set out the operational protocol for the process relating to disposals of HRA land and buildings.
• Raise capital receipts for capital spend and reinvestment in existing housing stock.
• Provide an opportunity to purchase or build additional housing.
• Improve the long-term sustainability and energy efficiency of our council homes

The Council must follow a wide range of laws and relevant case law when disposing of its interest in land.

Key legislation includes the Local Government Act 1972, the Housing Acts 1985 and 1988, the Local Government Act 1988, the Allotment Acts 1908 –1950, and the Charities Act 2011.

When considering disposals under this policy, legal advice will be sought at an early stage to identify the legal requirements and ensure the Council complies with all relevant laws.

Wealden District Council owns and manages approximately 3100 Council homes and 350 garage sites within the Housing Revenue Account. In addition, the HRA owns other assets such as recreation and amenity space, parcels of land (e.g. garden plots), woodland, pathways, un-adopted roads, alleyways and other open areas on residential estates.

A local housing authority has no statutory obligation to dispose of any assets other than under the Right to Buy (RTB).

To make best use of Housing Revenue Account assets, there are circumstances where disposal of an HRA asset will lead to a net overall benefit. Examples of this may include a Council property which requires extensive improvement works which may not be cost effective to complete to our lettable standard, or garage sites and small parcels of land with no development potential, or which add little or no value to the council or our tenants.

For the purposes of this policy, a disposal is defined as including:

• (a) A freehold transfer; or
• (b) The grant of a lease exceeding seven years

A disposal may also include the granting of easements and options.

Leases of seven years or less are not covered by this Policy, as they are exempt from the statutory requirement to obtain best consideration.

Surplus parcels of HRA Land

The Council may receive expressions of interest for the purchase of land or may identify a parcel of land where it is in the Council’s interest to dispose. The Council will consider applications to purchase parcels of land from adjacent land and property owners and the Council reserves the right to consider applications from other parties where appropriate.

All proposals for disposal of an HRA asset, including HRA land, must be economically favourable for the Council via the receipt or saving on maintenance or repair of an asset, or a combination of receipt and saving.

In some circumstances, the sale of a small piece of land attached to a garden may save on resources such as grass cutting or administration costs.

Disposal will only be considered where there is no development potential for the Council to deliver or facilitate affordable housing.

Garage and parking spaces

The Council owns and manages a number of garages within the HRA. The majority of these are let on a rolling license and charged a weekly license fee. In some cases, there may be reasons to consider disposal of a garage or parking space where:

• the garage condition is poor enough to make the garage uneconomical retain
• lack of demand
• historic disposals in the immediate locality or the land or property is not adjacent to a larger area of land or property in the ownership of the Council.
• income from license fees does not cover the costs of administration
• other reasons where it is in the Council’s interest to dispose of the asset

Disposal will only be considered where there is no development potential for the Council to deliver or facilitate affordable housing.

Dwellings

This section applies to the sale of single dwellings held in the HRA. This section excludes Right to Buy which is covered by statutory obligations under Part V Housing Act 1985.

In exceptional circumstances, it may be necessary to consider disposal of single dwellings where:

• the property condition is poor enough to make the property uneconomical to bring it up to our lettable standard
• the cost of increasing the energy efficiency of the dwelling would result in a cost significantly greater than income
• the market value is substantial and liquidating the asset will help to provide more homes and improve communities.

Any proposed sale of a block or other group of dwellings will be carefully considered by the Council, and Secretary of State approval for the disposal may also be required. Legal advice will be sought at the earliest opportunity in such cases.

Community assets

Community assets such as recreation or amenity spaces held in the HRA may be considered for community organisations including town and parish councils and charitable organisations, where there is a clear case for local control or management of a key community asset and demonstrable benefits to our Council tenants of the transfer.

Any disposal to a community group must be supported by a viable business plan; be able to demonstrate clear social, economic, or environmental benefits; and align with the Council’s strategic objectives.

Where any asset is considered for disposal, the value must be established by an Royal Institution of Chartered Surveyors (RICS) qualified surveyor. Valuations will undertaken on the basis that any disposal will be at market value.

Specifically, for HRA community assets, consideration must be given to the ‘who benefits’ principle. This is because assets and proceeds must be for the benefit of HRA tenants. As such, HRA assets would not normally be disposed of at undervalue or without strong justification and demonstration of the specific benefits to our Council tenants.

Where a disposal is instigated by a party other than the Council, that the Council will look to recover its costs in dealing with the disposal, e.g. valuations, legal fees etc in accordance with the Council’s Fees and Charges Book.

The most appropriate form of disposal will be considered on a case-by-case basis considering existing restrictions or protections on HRA assets and must be in accordance with the Council’s governance framework.

Preparation will include internal consultation, legal review, assessment of development potential, valuation by an independent RICS surveyor, and obtaining relevant approvals under the Council’s governance framework.

The Council may dispose of assets by private treaty, public auction, market sale, informal tender or formal tender, ensuring compliance with its Financial Procedure Rules and achievement of best consideration.

A receipt from an HRA sale is capital if it is greater than £10,000. Capital receipts will be reinvested in the HRA through new build, acquisition, improvement of existing stock or repayment of debt.

Any small areas of land or other assets that are sold for less than £10,000 will be treated as HRA Revenue income.