80 Grasett Park , Georgetown, St. Saviour

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A decision made (01.02.08) to accept the recommendation for the sale of 80 Grasett Park, Georgetown, St. Saviour.

Decision Reference: MD-PH-2007-0087
Decision Summary Title :	DS - Proposed Sale of 80 Grasett Park, Georgetown, St Saviour		Date of Decision Summary:	01.02.07
Decision Summary Author:	Paul Griffin Senior Valuer/Estates Surveyor		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title :	WR - Proposed Sale of 80 Grasett Park, Georgetown, St Saviour		Date of Written Report:	01.02.07
Written Report Author:	Paul Griffin Senior Valuer/Estates Surveyor		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: 11/295 Proposed Sale of 80 Grasett Park, Georgetown, St Saviour
Decision(s): 1. The Minister accepted the recommendation of the Minister for Housing for the sale of 80 Grasett Park, St Saviour to Mr Jose Manuel De Freitas and Mrs Mhairi Christine Margaret De Freitas (née Stuart) as approved in MD-H-2007-0084 on the 23 November 2007 at a price of £225,000 representing a 25% discount as derived from the deferred payment scheme for First Time Buyers, as previously approved by the States in the Housing Property Plan (P6.2007). 2. Under Standing Order 168 (5) the Minister hereby authorised the Attorney General and the Greffier to pass any contract which is required to be passed on behalf of the Public.
Reason(s) for Decision: Under Standing Order 168 (1) (a) and 168 (2) (a) & (b) the Minister accepts the recommendation of a body established by the States to manage land and buildings owned by the public of Jersey in respect of the disposal of land.
Resource Implications: The Housing Department will receive a capital receipt as identified above, whilst foregoing a rental in respect of the above property.
Action required: 1. The Director of Property Holdings is to instruct the Attorney General and the Greffier to pass the necessary contracts, and to copy this decision to the Chief Executive of the Housing Department, the Minister, Treasurer and Deputy Treasurer.
Signature: Deputy J A N Le Fondré		Position: (Assistant Minister)* MD-PH-2007-0087
Date Signed:		Date of Decision (If different from Date Signed):

80 Grasett Park , Georgetown, St. Saviour - proposed sale

TREASURY AND RESOURCES DEPARTMENT

PROPERTY HOLDINGS

Property Transaction for Ministerial Decision - Minister for Treasury and Resources

Proposed Sale of 80 Grasett Park, Georgetown, St Saviour

PG 11/295

Purpose

To seek approval from the Minister for Treasury and Resources to allow the public to sell 80 Grasett Park St Saviour to a First Time Buyer in accordance with Social Housing Property Plan 2007 – 2016 P.6/2007, MD-H- 2007-0070 and MD-H 2007-0084 (Appendix 2).

Background

On 17 July 2007 the States approved P.6/2007 The Social Housing Property Plan 2007 – 2016. Section 3.7.4 empowered the Housing Department to sell 22 properties at Grasett Park, noted in Appendix D2 line 17 (Appendix 3).

Advice has been obtained from both the Comptroller and Auditor General and the Solicitor General in relation to this, the first of several hundred sales, who have confirmed that on the basis of the information provided to them that this sale is in accordance with the policy approved by the States Assembly under P.6/2007.

It is noted that in this instance the purchaser has been offered the full 25% (First Time Buyer) discount resulting in a total estimated discount of between 32% and 35% on open market value (see Appendix 1 for details). It should also be noted that the Minister for Housing has the power to offer different discounts (anywhere between 0% and 25%) on any other property sold under P.6/2007 in the future. Accordingly this one transaction does not set a precedent for any future transactions.

On 24 August 2007 the Minister for Housing adopted MD-H-207-0057 “Valuation Policy for sale of homes in accordance with the Property Plan”. All valuations, to be provided by a suitably qualified independent Chartered Surveyor and will be valid for a maximum of 89 days up to the passing of the sale contract through the Royal Court. If contracts are not passed the property will be revalued and the purchaser will be given the opportunity to purchase at the new value.

Given that this is the first property to be considered under this scheme, time has been required to obtain advice on the matter. It is therefore considered, on this transaction, equitable not to require the price to be renegotiated due to the time delay not having been caused by the purchaser.

Current Situation

The Minister for Housing seeks the acceptance of the Minister for Treasury and Resources to the terms and conditions which have been agreed between the Housing Department on behalf of the Public and Mr Jose Manuel De Freitas and Mrs Mhairi Christine Margaret De Freitas (née Stuart) for the sale of 80 Grasett Park St Saviour for the agreed restricted sale price of £225,000.00 representing 75% of the assessed first time buyer value. (APPENDIX 2)

This property, which was refurbished by the Housing Department in 1999, is a two storey traditionally built, three bedroom semi-detached house. The accommodation totals 624 sq.ft of living space (circa 800sq.ft. g.i.a.), together with garden (circa 1,600sq.ft.), a single garage and 2 externally parking spaces.

The restricted First Time Buyer value of the property has been assessed (by an independent, private sector valuer) at £300,000,

It is agreed that a condition of sale is that the property shall only be used as a single residential dwelling (or other such appropriate wording agreed with the Law Officers Department.

The prospective purchasers, Mr Jose Manuel De Freitas and Mrs Mhairi Christine Margaret De Freitas (née Stuart), were initially intending to acquire a refurbished property at Les Cloches, Le Squez. However, as provided for in the Allocation Policy for Homes for Sale HD 20 MD-H-2007-0058 (Appendix 4), it is their intention to acquire the property in which they currently reside.

In a letter dated 14 November 2007 the Director of Estate Services confirms that the proposed purchasers are bone fide first time buyers approved by the Minister for Housing.

It has been confirmed by both the Housing Department and the Law Officers Department that the property that is the subject of this decision can be treated as a “stand alone property” thus will not be liable for maintenance charges (unless otherwise agreed) for common areas used by the majority of the estate. Further research is being undertaken in order to ensure an appropriate mechanism for such maintenance (including long term provision) exists for this and other estates where future property sales are envisaged.

Conclusion

The valuation and the deferred sum are in accordance with the Social Housing Property Plan 2007 – 2016 P.6/2007 approved 17 July 2007and MD-H-207-0057 dated 27 August 2007 “Valuation Policy for sale of homes in accordance with the Property Plan”.

The Minister for Housing seeks the acceptance from the Treasury and Resources Minister to the sale of 80 Grasett Park St Saviour to Mr Jose Manuel De Freitas and Mrs Mhairi Christine Margaret De Freitas (née Stuart) for the agreed restricted sale price of £225,000, representing 75% of the assessed first time buyer value.

Recommendation

Ordinarily the Property Holdings would/could not recommend such a transaction as the disposal is at less than best consideration (i.e. best financial value). However, it is accepted that the Minister for Housing is trading financial value for social benefit in accordance with a decision made by the States Assembly. This therefore does allow the property to be sold at a restricted value and accordingly it is recommended that the decision of the Minister for Housing is accepted.

Written By: Paul Griffin

Signature …………………………

Authorised By: David Flowers

Signature ………………………… Date 1 February 2008

APPENDIX 1

SUMMARY

	£	%
Estimated open Market Value	330,000 - 350,000

Discount given	30,000 – 50,000	10% - 15%

Assessed First Time Buyer (“FTB”) Value	300,000

Discount given	75,000	25%

Agreed sale Price	225,000

Total discount given (open market to sale price)	105,000 – 125,000	32% - 35%

Upon the disposal the vendor will pay back to the Public £75,000 (min) even if the market value reduces or 25% of the market value at the time of sale, whichever is the higher.

As an example if the property was subsequently sold for a value of £400,000 the capital receipt to the Public would be £100,000.

Extract of P.6/2007 and section 3.7.1:

P.6/2007 THE STATES are asked to decide whether they are of opinion -

to refer to their Act dated 27th June 2006 in which they adopted the Strategic Plan 2006 to 2011 and, in particular, Section 3.8 of that Plan and –

(ii) to agree that the Housing Department should make arrangements to enable States rental tenants to apply to buy one of the properties listed in Appendix D of the Plan, according to the 10-year timetable specified, on a shared equity basis or at full value, and with first-time-buyer conditions attached, as set out in Section 3.7.1 of the Plan;

3.7.1 Characteristics of shared equity

Under shared equity, or ‘assisted purchase’ schemes – unlike with shared ownership – a tenant acquires the freehold title to a property, while paying less than 100% of the market value, but without having to pay rent on the remainder. This is effectively the ‘Homebuy’ principle operating within the ‘internal market’ of social rented housing, rather than in the open market.

In order to extend the opportunity to as many people as possible, discounts of up to 25% are offered. The housing provider accepts the initial notional loss incurred through the discount, but recovers it, as with Homebuy, when the property is resold or ownership is transferred in any other way. (If the purchaser wishes to clear the debt earlier, the same recovery process occurs, but based on independent valuation, rather than actual sale.) The amount repayable is linked, as previously described, to the percentage size of the discount and the market value of the home at the time of settlement.

The system has a number of advantages, as stated above, over ‘Right to Buy’. It also has distinct advantages over shared ownership and sales at discount, effectively combining the best of the other approaches. Under the shared equity model for extending home ownership, the purchaser may buy at a substantial discount, but –

 there is a ‘clean break’, with minimal ongoing bureaucratic burden;

 limiting sales to existing social rented tenants has the effect of not exacerbating any perceived housing shortage – indeed, there would be a presumption that the sitting tenant should always have first refusal on any property offered for sale;

 first-time buyer conditions can be imposed, preserving the property, in perpetuity, for that section of the market, and greatly restricting any opportunity for massive ‘windfall’ profits;

 the public interest is protected, because of the condition requiring that when the property is next conveyed, the States will receive a share of any increase in value, in proportion to the discount given;

 maintenance obligations for the whole of the property are passed onto the purchaser, which, together with the reduction in management costs, will to some extent offset the foregone 25% rent;

 the transaction is based on the full first-time buyer market value of the property, rather than on an arbitrarily discounted value. A buyer who could afford to pay the full price would be encouraged to do so – improving cash flow to the States and allowing the purchaser to reap the full benefit of any subsequent increase in equity;

 the sale is a conventional one, requiring no specific new legislation;

 the shared equity system of large, recoverable discounts genuinely makes house-purchase an affordable option for large numbers of people who could not otherwise have contemplated it and who would therefore have been permanently trapped in the social rented sector, with an ongoing requirement for some level of subsidy.

APPENDIX 2

Housing Department

Ministerial Decision MD-H-2007-0084

Decision Reference: MD-H-2007-0084

Decision Summary Title :

DS-sale-80 Graset Park

Date of Decision Summary:

23 November 2007

Decision Summary Author:

Dominique Caunce

Decision Summary:

Public or Exempt?

(State clauses from Code of Practice booklet)

Exempt 3.2.1 (a)(i)

Type of Report:

Oral or Written?

Written

Person Giving

Oral Report:

Written Report

Title :

WR-sale of 80 Graset Park De Freitas dc

Date of Written Report:

23 November 2007

Written Report Author:

Dominique Caunce

Written Report :

Public or Exempt?

(State clauses from Code of Practice booklet)

Exempt 3.2.1 (a)(i)

Subject:

To agree the sale of 80 Grasett Park, St Clement

Decision(s):

The Minister;

approved the sale of 80 Grasett Park, St Clement, to Mr Jose Manuel De Freitas and Mrs Mhairi Christine Margaret De Freitas (nee Stuart) for the sum of £225,000,
requested that the Treasury & Resources Minister similarly agree and authorise the Greffier of the States and Attorney General to pass the necessary contract of sale before the Royal Court;
directed that the resultant funds be credited to HYC029.120410

Reason(s) for Decision:

To ensure that the sale is carried out in accordance with Standing Order 168 and the States approval of P6.2007.

Resource Implications:

Financial: £225,000 receipt as agreed on States approval of P6.2007 to be credited to HYC029.120410 with additional retained equity valued at £75,000

Action required:

Director of Tenant Services to arrange for Treasury and Resources Minister approval and oversee the passing of the contract and receipt of funds

Signature:

Position:

Minister

Date Signed:

Date of Decision (If different from Date Signed):

Properties for Sale - October 2007. (MD-H-2007-0070)

Introduction A decision made (05/10/2007) regarding: Properties for Sale - October 2007.

Decision

Decision Reference: MD-H-2007-0070
Decision Summary Title :	DS – Properties for Sale – October 2007		Date of Decision Summary:	3 October 2007
Decision Summary Author:	Carl Mavity – Director of Estate Services		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:
Written Report Title :	Properties for sale on approved shared equity scheme – October 2007		Date of Written Report:	1 October 2007
Written Report Author:	Carl Mavity – Director of Estate Services		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: To agree the market and shared equity values for the homes for sale
Decision(s): The Minister approved the First Time Buyer values as set out in the report and the sale of the homes to States Tenants under the agreed shared equity scheme.
Reason(s) for Decision: To ensure that prices accurately reflect the market.
Resource Implications: Financial: £1,057,500 in immediate income plus £352,500 in stored up equity retained
Action required: All sales to be carried out in accordance with Policy HD20 – Allocation policy for sales (MD-H-2007-0058).
Signature:		Position: Minister
Date Signed:		Date of Decision (If different from Date Signed):

Report

DATE OF REPORT:-1st October 2007

REPORT TO THE HOUSING MINISTER

PROPERTIES FOR SALE ON APPROVED SHARED EQUITY SCHEME – SETTING OF PRICES – OCTOBER 2007

On 17th July 2007 the States approved P6.2007 The Social Housing Property Plan 2007 – 2016.

That decision empowered the Housing Department to sell 26 properties on the open market as and when they were vacant and authorised the sale of 800 states rental homes to states tenants over a 10 year period.

On 24th August 2007 the Minister will recall that he adopted a policy in respect of the method of valuation for those homes to be sold MD-H-2007-0057 refers.

A competitive tender process was undertaken with local firms who hold M.R.I.C.S or F.R.I.C.S. accreditation. Buckley & Company submitted the lowest compliant tender and have been appointed to carryout valuations on the Department’s behalf.

All valuations provided will be valid for a maximum of 89 days.

A number of tenants planning to purchase at Les Cloches are presently occupying homes in areas where the Department plans to sell homes to tenants, for instance Grasset Park and Oak Tree Gardens. These tenants have expressed a desire to be able to consider whether they would prefer to purchase the home they are presently living in rather than one of the new homes at Les Cloches.

PROPERTY	FIRST TIME BUYER VALUATION	PROPOSED SHARED EQUITY SALE PRICE @ 75% OF VALUE
33 Grasset Park	£475,000	£356,250
53 Grasset Park	£300,000	£225,000
80 Grasset Park	£300,000	£225,000
27 Oak Tree Gardens	£335,000	£251,250

Recommendation

That the Minister approve the First Time Buyer values and the sale of the homes to the present occupants or in the event that the present occupants exercise their existing option to purchase at Les Cloches that the properties be offered to other States Tenants for sale under the agreed shared equity scheme as set out in the Property Plan and the Allocation Policy for Homes for Sale Policy HD 20 (MD-H-2007-0058 refers).

C Mavity

Director of Estate Services

1st October 2007

APPENDIX 3

Appendix D2

	A	B	C	D	E	F	G	H
1	SALES OF HOUSES ON STATES SHARED EQUITY SCHEME 2007 - 2016
2	Estate	Parish	1 B/R	2 B/R	3 B/R	4 B/R	5/6 B/R	Total
3	Estate	Parish	1 B/R	2 B/R	3 B/R	4 B/R	5/6 B/R	Total
4
5	Balleine Close, La Rue de la Croix	St Clement		3	2			5
6	Brighton Lane Mews 1 & 2, Brighton Lane	St Helier		2				2
7	Caesarea Court, Val Plaisant - Following Redevelopment	St Helier			9			9
8	Clearview Street 10	St Helier			1			1
9	Cleveland Avenue 2	St Helier		1				1
10	Clos des Sables 163 - 170	St Brelade		8				8
11	Clos des Sables 108 & 109a	St Brelade			2			2
12	Clos Du Roncier	St Clement		2	56			58
13	Clos Gosset	St Saviour		5	18			23
14	Convent Court, Val Plaisant Following Redevelopment	St Helier			9			9
15	De Quetteville Court - After Redevelopment	St Helier			12			12
16	Devonshire Place 2	St Helier				1		1
17	Grasset Park	St Saviour			20	2		22
18	Jardin des Carreaux	St Helier			10	2		12
19	Homeville, Devonshire Lane	St Helier		4				4
20	La Cache Pallot, Gorey Village	Grouville		2				2
21	La Place Le Couteur	Grouville	1	1	2			4
22	La Place Noel, La Chemin des Malmeres	Grouville		3			1	4
23	La Rue de Carteret, Bashfords - Rue des Pres	St Saviour		5	11			16
24	Le Bel Collas, Gorey Village	Grouville		2				2
25	Le Bel Gaudin, Bashfords - Rue des Pres	St Saviour		6				6
26	Le Bel Mallet, Bashfords - Rue des Pres	St Saviour		2	1			3
27	Le Bel Peree, Bashfords	St Saviour			1			1
28	Le Bernage, La Rue St Thomas	St Saviour			1			1
29	Le Douet De Ste Croix, La Route es Nouaux	St Helier			1			1
30	Le Squez after Refurbishment	St Clement		39	136	18		193
31	Les Cinq Chenes, Princess Tower Road	St Saviour		1	59			60
32	Les Hoummetts	Grouville			2			2
33	Les Petit Houmettes, Gorey Village	St Martin			1	1		2
34	Les Quatre Bras, Springfield Road	St Saviour		1	2			3
35	Millais Park 1, Mont Millais	St Helier			1			1
36	Modena, Clarence Road	St Helier		1				1
37	Nicholson Close	St Helier		10		6		16
38	Oak Tree Gardens	St Helier		4	14			18
39	Old St John’s Road 17	St Helier		1				1
40	Rose Cottage, Valley Road	St Helier	1					1
41	Rozel, Greve d’Azette	St Clement			1			1
42	Simon Place 11	St Helier		1				1
43	St Lawrence Arsenal, La Grande Route de St Lawrence	St Lawrence			1			1
44	St Martin’s Arsenal, La Rue du Clos Fallu	St Martin		4	7			11
45	St Peter’s Arsenal, La Rue des Landes	St Peter		4	4	3		11
46	Stopford Road 39	St Helier		1				1
47	The Lookout, Princess Place	St Clement			1			1
48	Tradewinds, South Hill	St Helier				1		1
49	WestMount Park, Westmount	St Helier		8				8
50	TOTALS		2	121	385	34	1	543

APPENDIX 4

Allocations Policy for Sales (MD-H-2007-0058)

Introduction A decision made (05.09.07) to set out the allocations criteria for those wishing to buy property from the Housing Department as per the Social Housing Plan 2007-2016.

Decision

Decision Reference: MD-H-2007-0058
Decision Summary Title :	DS – HD20 Allocations Policy for Sales		Date of Decision Summary:	24 August 2007
Decision Summary Author:	Dominique Caunce – Director of Tenant Services		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Oral		Person Giving Oral Report:	Dominique Caunce – Director of Tenant Services
Written Report Title :			Date of Written Report:	15 June 2007
Written Report Author:	Dominique Caunce – Director of Tenant Services		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: A policy to set out the allocations criteria for those wishing to buy property from the Housing Department as per the Social Housing Property Plan 2007 – 2016
Decision(s): The Minister approved Policy HD20.
Reason(s) for Decision: To ensure a robust and transparent policy exists in respect of the sales of States owned property to States tenants.
Resource Implications: NIL
Action required: Director of Tenant Services to ensure that all homes sold through the Social Housing Property Plan 2007-2016 are sold in accordance with Policy HD20.
Signature:		Position:
Date Signed:		Date of Decision (If different from Date Signed):

Report

POLICY HD20

STATES OF JERSEY HOUSING DEPARTMENT

ALLOCATION POLICY FOR THE SALES OF HOUSES IN ACCORDANCE WITH THE PROPERTY PLAN

This policy will be used by the Housing Department to allocate properties for sale under a shared equity scheme in line with the Departments Property Plan.

All allocations/in principle agreements to sell are subject to contract.

No deposit will be required by the Department.

Who will qualify to purchase?

Any current tenant of States owned social housing will qualify to purchase. They must have been a States tenant for a minimum period of six months, be residentially qualified to purchase under the Housing Law and not be a current property owner.

Tenants who have owned or inherited property in the past will not be excluded from this scheme.

Properties can be purchased in joint names with partners, as long as they are residentially qualified to purchase under the Housing Law. If the partner already owns a property, then that property must be sold, to a First Time Buyer, before a purchase could be made under the Shared Equity Scheme.

How will we prioritise allocations?

If more than one individual/couple wish to purchase a particular property, priority will be given as follows:-

To the current sitting tenant of the property;
Need (i.e. a family will be given a higher priority than a single person for a family home);
Links to the Estate/Area;
Length of tenancy.

Other information may be taken into account and used at the discretion of the Housing Minister.

Effective Date

The policy shall become active on the date on which the respective Ministerial Decision was signed by the Minister.

Policy Drafted	June 2007	D Caunce Director of Tenant Services

Policy Reviews	Date	Reviewed By