Pursuant to Paragraph 11 of the Council Procedure Rules the following oral question was put by Councillor Osborne and answered by Councillor Byrne.

Question: Are Alliance (Rother) Homes set up in competition with established house building companies locally and nationally?

If Alliance (Rother) Homes develop properties on this Council’s land are there any safeguards that protect the ‘low cost / shared ownership’ properties going forward, i.e. will the properties remain as ‘low cost‘ into the future or will the first user after a period of time be able to sell on into the open market?

Answer: Is Alliance Homes in competition? No. Admittedly, if you looked at the finance of Alliance Homes (Rother), you will know there is a drawdown facility on a project by project basis. As Rother has access to finance at a low percentage that would, if that was passed on at the same percentage give Alliance Homes (Rother) a commercial advantage – but that is not going to happen.  And in fact, the uplift in that percentage might, under some circumstances, almost provide a revenue stream.  But the quick answer is no; we are not in any way intending Alliance Homes (Rother) to compete with outside building companies. 

The second question is more interesting.  Certainly on a scheme by scheme basis we will need to look at the overall financial model, and if some of that is open market housing and we sell it as open market housing at open market rates then it would not work to try and impose any sort of restriction on who can sell it on.  However, you are talking about affordable or low cost; if it is affordable it comes under that category that will be bought by one of our registered providers.  The registered providers can offer straight forward economical rent to people who come from our housing register or a variety of shared ownership deals.  Those shared ownership deals do ramp up to full ownership over a certain length of time, but at the end of that length of time you are a house owner and you stand with all the other house owners and have the ability to cash in if you like on any price rise.  That is not the reason for the scheme.  The reason for the scheme is to get people on the housing ladder and to get people already benefitting from the rise in house prices as their percentage of ownership of that house goes up in price.  So affordable no, low cost is more difficult.  It will very much be on a project by project basis.  Alliance Homes (Rother) has still got to make money so low cost will likely be in providing the right houses, with the right ecological safeguards, all the latest techniques but doing it as economically as possible so we can offer those for sale; and those that we do offer for sale if possible, I believe we can put a covenant on if we sell those on the open market as to how long you have to remain there before you can sell them on.  Certainly that was done by the Conservative Government a long time ago, if you bought your Council house you could not immediately sell it on, so it strikes me there is that mechanism.  In all honesty I do not know but it will be done on a scheme by scheme basis and again, we are not looking for Alliance Homes (Rother) to provide a cheap way of getting around the ordinary commercial realities and letting some people profit.  I hope that is satisfactory.