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  • Latch purchases empty and rundown houses and refurbishes them to create good quality homes
  • Most of the refurbishment work is done by LATCH staff and unemployed trainees. Some have construction experience already, while others learn new skills as they work on site
  • When they’re fully modernised and furnished, the properties provide supported housing for people who are homeless or in housing need and are ready to make positive changes in their lives
  • By renovating rundown houses and being a responsible landlord LATCH contributes to improving local streets and communities in Leeds
  • Over a period of years, Latch had secured 13 residential properties from Leeds City Council on 25 year leases at peppercorn rents
  • With the DCLG Community Grants Programme coming to an end in 2015, LATCH decided to explore the options for raising further finance against the value of its assets
  • As part of this exercise it resolved to surrender the existing leases on the 13 properties and to renew them for a period of 99 years (at a peppercorn rent of £1 per annum)
  • In September 2015 a Cabinet Report was submitted to the local authority and a decision was taken to issue new leases for a period of 99 years
  • As of part of the lease arrangement LATCH undertook all management, refurbishment and maintenance costs and the Council estimated that it could save in the region of £360,000 over the lifespan of the lease arrangement
  • LATCH was able to borrow £340,000 against the value of the properties, although this was abated by the local authority’s requirement that the properties should always be let on affordable rents on assured tenancies

Key Messages

  • Extending leases in this way offers the opportunity to CLH organisations to raise additional             funding to provide further housing, without the local authority incurring any debt
  • Other local authorities should also be able to use the same powers granted through The General Consent D, under Section 25 of the Local Government Act 1988 (Local Authority Assistance for Privately Let Housing) 2010, in the same way provided that they have not exceeded the amount of financial assistance given under the Consent in the current financial year and that the properties would be occupied by persons with a special need
  • As the proposal to lease the properties at less than best consideration without any element of competition constituted the provision of a subsidy, the local authority needed to be satisfied that it did not contravene the EU’s State Aid rules
  • However it did not, since funding for the provision of social housing is considered to be a Service of General Economic Interest (SGEI), provided that the recipient of the subsidy is placed under an obligation to provide the social housing with the subsidy

Where to Find Out More

 

A Leeds City Council Cabinet Report: Approval to Grant Thirteen 99 year Leases at Less Than Best Consideration to Leeds Action to Create Homes (LATCH). September 2015 is here:

Guidance On State Aid can be found here:

 [PD2]Cross reference to Toolkit Section 3.5

Published in March 2018

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