Agenda and minutes

Councillor Boden welcomed members of the public and press watching the livestream of the Investment Board meeting via YouTube due to Government guidance on social distancing. The meeting was held in accordance with the provision set out in the Local Authorities and Police and Crime Panels (Coronavirus) (Flexibility of Local Authority and Police and Crime Panel Meetings) (England and Wales) Regulations 2020 and with Fenland District Council’s Virtual Meeting Protocol.

To approve the public minutes of the previous meeting held 18 September 2020.

The public and confidential minutes of the meeting held 18 September 2020 were approved.

To provide the Investment Board with an opportunity to consider investing in residential property as part of the Commercial and Investment Strategy.

Members considered the Consideration of Investment in Residential Housing report presented by Peter Catchpole. 

Members made comments, asked questions and received responses as follows:

·         Councillor Boden said that having reviewed the report he thinks the Base Financial Assumptions are subject to challenge.  We need to look at what our own potential immediate borrowing costs may be, and it would be unlikely that we would be looking at a 5% p.a. He feels the management costs are too low but the responsive maintenance costs too high and incorrectly dated, as well as the major repairs provision from year 5.  For example, the biggest repairs likely to arise would perhaps involve a replacement boiler and this could potentially happen any time from year 1. However, he believes the occupancy level of 96% is achievable if managed properly and the  only way this can be done is if the day to day involvement of officers is kept to a minimum; we are not able to run a private property company and would need a professional property management agent to work on our behalf.  Our primary involvement would be at the acquisition and potential disposal stage. He would look towards concentrating the area where we sought to have the accommodation and given the market that exists, should be Wisbech based.  Councillor  Boden added that we should be looking at properties that would achieve the better yields, which he feels to be smaller flats, which exist in a fair number within Wisbech, and particularly those where the leases do not have a very long period still to run. He would hope these would have an average of at least 8% gross yield and a 5% net yield. However the important thing is that the provision of services from FDC to Fenland Futures Limited (FFL) would itself manage to defray some of our costs within FDC and we may have some significant differential in terms of the interest to be charged because if FFL were a standalone company it would not be able to obtain the level of funding that FDC could.  He noted that no account had been taken in the analysis of capital appreciation, therefore we would need to have a plan for both the capital value of properties and their disposal.  Councillor Boden stated that he was disappointed that it has not been mentioned that we could have our own housing officers to view each property  and carry out an HHRS assessment  instead of having a survey which would reduce our external costs, as would doing our own searches.  He added there was no mention of a cash purchase factor, which would put us in a stronger negotiating position in terms of the capital cost of acquisition, neither have we  factored in any renovation costs which may be required at the start of an acquisition.  Furthermore, we have not allowed for the cost of annual gas or electrical safety certificates which are legally required.  In conclusion, it would be essential to have a  ...  view the full minutes text for item IB6/20

To consider the draft 6 Month Forward Plan

Councillor Boden presented the Investment Board Forward Plan for information.