TREASURY AND RESOURCES DEPARTMENT
PROPERTY HOLDINGS
Property Transaction for Ministerial Decision –
Minister for Treasury and Resources
Proposed Sale of 74 Grasett Park, St Saviour
Purpose
To seek approval from the Minister for Treasury and Resources to allow the Public to sell the above property to the first time buyers detailed below in accordance with the Social Housing Property Plan 2007 – 2016 (P.6/2007) and Housing Ministerial Decision, (for ease of reference a copy of the relevant Ministerial Decision is attached at 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 certain properties as detailed in Appendix D2 of P6.2007.
As noted in MD-PH-2007-0087, advice has previously been obtained from both the Comptroller and Auditor General and the Solicitor General on the principles underlying these disposals. They have confirmed that on the basis of the information provided to them on the specific sale in question, that the transaction was in accordance with the policy approved by the States Assembly under P.6/2007.
The disposals detailed in this report follow the same principles as the disposal documented in MD-PH-2007-0087, and it is therefore considered that the advice received continues to be applicable to these circumstances. MD-PH-2007-0087 incorporates extracts of P6/2007, including section 3.7.1 and Appendix D for ease of reference. It is therefore not considered necessary to reproduce those extracts in this report.
It is noted that purchasers have been offered varying levels of discount as detailed below. It should also be noted that the Minister for Housing can offer different discounts (anywhere between 0% and 25%) on any property sold under P.6/2007 which also states that “a buyer who could afford to pay the full price would be encouraged to do so…”. Accordingly these individual transactions do 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 these are some of the first properties to be considered under this scheme, time has been required to obtain advice on the matter. It is therefore considered, on these transactions, equitable not to require the price to be renegotiated due to the time delay not having been caused by the purchaser.
The properties are all sold with first time buyer conditions attached in perpetuity and have been valued in accordance with the Housing Ministers’ Valuation Policy as detailed in MD-H-2007-0057. It is also 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). Property Holdings acknowledge that these properties do not have common areas with associated maintenance liabilities and accordingly no contractual provisions are required in respect of any additional related charges.
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 for the transactions set out in Appendix 1.
Upon the disposal the vendor will pay back to the Public either (as a minimum) the sum identified in the relevant table in Appendix 1 as the “deferred payment amount” 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 a property was subsequently sold for a value of £400,000 the capital receipt to the Public would be £100,000.
Conclusion
The valuation and the deferred sum are in accordance with the Social Housing Property Plan 2007 – 2016 P.6/2007 approved 17 July 2007 and MD-H-207-0057 dated 27 August 2007 “Valuation Policy for sale of homes in accordance with the Property Plan”.
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(s) of the Minister for Housing is accepted.
Written By: Paul Griffin
Signature …………………………
Authorised By: David Flowers
Signature ………………………… 20 March 2008
Appendix 1
Properties for disposal:
Housing MD Ref: MD-H-2008-0030
-
| Name and address of property : | 74 Grasett Park Estate, St Saviour, JE2 7XD. |
| Description | The property comprises a refurbished 2 storey semi-detached 3 bedroom house of single block (with external insulation) construction. The refurbishment works were completed approx. 8 years ago. The external walls are part rendered and part pebble dashed. Brick built garage. Hipped man made slate covered roof. The property retains the original concrete ground floor and suspended timber first floor. Double glazed powder coated aluminium windows. Plastic fascias and gutters. |
| Approx. size of accommodation (GIA) | 700 sq ft |
| Approx. size of site | 1,400 sq ft |
| Proposed purchaser | Mr Peter Nicholson & Mrs Joan Nicholson (nee Lynch) |
| Appendix D Line Ref | 17 |
| Any special terms or conditions to be included in the contract | None |
| Summary of transaction | £ | % |
| Estimated market value: | 330,000 – 345,000 | |
| FTB discount given: | 30,000 – 45,000 | 10 % - 15 % |
| Assessed FTB value: | 300,000 | |
| Deferred payment amount: | 75,000 | 25% |
| Agreed sale price: | 225,000 | |
| Market value to sale price difference: | 105,000 – 120,000 | 32 %- 35% |
| | | | |
APPENDIX 2
Housing Department
Ministerial Decision
Decision Reference: MD-H-2008-0030 |
Decision Summary Title : | DS-sale- 74 Grasett Park- February 2008 | Date of Decision Summary: | |
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? | Oral | Person Giving Oral Report: | Dominique Caunce |
Written Report Title : | | Date of Written Report: | |
Written Report Author: | | Written Report : Public or Exempt? (State clauses from Code of Practice booklet) | |
Subject: To agree 1 sale, as detailed in the table below, through the Social Housing Property Plan 2007 – 2016. |
Decision(s): The Minister; - approved the sale of the following property, to the approved First Time Buyers and at the actual sale price set out below:-
74 Grasett Park Estate, St Saviour, JE2 7XD, with a first time buyer value of £300,000 to Mr Peter Nicholson & Mrs Joan Nicholson (nee Lynch) for the sum of £225,000. The transaction being subject to a deferred payment condition as set out in the individual contract of sale. The property shall also be subject to conditions which will require that; any onward sale is to a bone fide first time buyer and that only one unit of accommodation shall be maintained on each site. It is not anticipated that there are any common areas in the ownership of the Public to which access needs to be granted to the purchasers. Therefore, it is not considered necessary for a clause to be included in the contract of sale which would provide for the recharging of any costs associated with operating, maintaining, renewing and replacing those common parts and the associated infrastructure by the Public to the homeowner. - requested that the Treasury & Resources Minister similarly agree and authorise the Greffier of the States and Attorney General to pass the necessary contracts of sale before the Royal Court;
- directed that the resultant funds be credited to HYC029.120410
- rescinded MD-H-2008-0017
|
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 a deferred payment of £75,000. |
Action required: Director of Tenant Services to arrange for Treasury and Resources Minister’s 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): |
| | | | |
gov.je