Homes set aside for temporary housing to be absorbed into Westminster’s orbit

By Adrian Zorzut, Local Democracy Reporter

A total of 368 properties previously leased to Westminster City council for use as temporary accommodation (TA) are a step closer to becoming bought up.

The local authority said it had completed due diligence checks and finalised the terms of an agreement with housing association A2Dominion.

According to a council report shared on Friday, officers also settled a ‘rent dispute’ with A2Dominion and agreed to write off or waive any grants or clawback conditions to complete the purchase. The task of negotiating a deal was delegated to senior council officials in February.

The portfolio consists of a variety of flats and houses ranging from one to six bedrooms located within the borough and across Central and North London, a February council report shows. A majority (239) will be two-bedroom homes. It is not clear how much the properties are expected to cost the council.

In February, Westminster City’s cabinet confirmed it would enter into a Credit Tenant Lease. This financial instrument allows the council to own the properties at the point of purchase and pay for them over a 42-year period from the council’s General Fund.

This funding structure will also include approximately £33.5m which the council is expected to use to undertake refurbishment work to bring the homes to an Energy Performance Certificate of C or better. This is understood to impact 39 per cent of the homes and equate to £91,000 per property.

It will also establish a Limited Liability Partnership (LLP), which it will wholly own. This was a condition placed on Westminster City in order to secure funding from Macquarie Asset Management.

The deal came about after A2Dominion, via Fifth Capital Limited, approached the council to ‘dispose’ of the 368 properties the local authority was using as temporary accommodation, the February report says. The properties had been used as TA by Westminster City for the past 15 years.

With demand for TA having increased significantly over the last three years, the council has actively sought to buy its own stock rather than rely on more expensive rented commercial accommodation.

The authority currently leases 3,400 units of temporary accommodation from private landlords and organisations to meet its statutory obligations.

Picture: Pixabay/Nick-the-Photographer