Highland to sell off a fifth of its homes

Alex Neil, the Scottish housing minister, has spoken to the local authority twice about the proposal since May, which could see a new build programme of 650 homes for the Highlands over a five-year period.

The council would sell 3,000 of its 13,500 stock to a special purpose vehicle - likely to be an investment for pension fund, bank, or insurance company - for £31,500 each.

The homes would be sold as they become vacant for re-let, which is estimated will be around 600 vacant houses per year for five years.

This would generate a receipt of £18.9 million per year over five years, which would fund a new build programme of 130 houses a year - a total of 650 new council houses over five years.

The council would continue to allocate, manage and maintain the transferred stock for which the private sector partner would pay an agreed fee.

People on the housing register could live in the homes - at a rent between average council rent and private rent of about £75 per week over 52 weeks - and the SPV would make money from the rents.

The loss of rental income would partially be offset by the rent received on new build housing and ownership of the sold properties would revert back to the council at no cost after 25 years.

The council’s housing and social work committee was set to approve the move at a cost of £100,000 to examine the feasibility of the scheme.
Margaret Davidson, chair of the council’s housing and social work committee, said: ‘This is an interesting proposition that has come forward from our housing and property management team, which allows the council to release equity on the asset value of council housing becoming vacant to re-let to generate funds for new council house building.

‘We estimate this could number 650 over a five year period. The number could be significantly increased if the Scottish Government continues to provide subsidy for council house building.’

The proposals emerged during an ongoing Scottish Government consultation - which currently has no deadline - seeking ideas on how to increase housing supply in the country with diminished funds as a result of the recession.

Mr Neil said: ‘We are very pleased that Highland Council has come forward with this innovative idea to help boost housing in the local area and I have been equally impressed and encouraged by the range of stakeholders coming forward with fresh thinking during this important consultation process.’

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