Purpose

NewShare is a
shared equity scheme introduced in 2013.  Its stated aim was to assist Newham residents to
access affordable home ownership. 
Following the 2018 elections the Council agreed a new Housing
Delivery Strategy and ceased to make more properties available via
the NewShare scheme, as its overall aim
of providing low cost owner occupation, principally through the
sale of void Council properties, is not closely aligned to the
current strategy.  The principal focus
of the new strategy was to increase the supply of social rented and
other affordable housing schemes for residents. 
 
As a result, the Council retains what is, in
effect, a small mortgage portfolio. 
This is inefficient due to the small scale and it is therefore
proposed to seek to find a buyer for the portfolio. This would
generate a capital receipt for the Council and, importantly, enable
the transfer of the mortgages to a provider who would be expected
to administer them more efficiently and effectively.
Portfolio currently consists of 174 properties
and has proved difficult for the Council to manage.  Due to the closed nature of the scheme, its lack
of strategic or political contribution and challenges to
effectively manage, it is proposed to correct any errors and divest
the portfolio to a specialist mortgage funder.
 
The report will seek the approval of the
following:
 
To approve the assessment and possible
disposal of the Council’s equity interest in the New Share
portfolio.
 
To delegate authority to the Corporate
Director of Resources in consultation with the Cabinet Member for
Finance and Corporate Services to complete the review, remediation
and sale of the portfolio, subject to completion of the necessary
due diligence.

Decision

Decision:
 
For the reasons set out in
the report and its appendices Cabinet RESOLVED to Agree:
 

i) 
To approve the disposal of the Council’s equity interest in
the New Share portfolio, subject to satisfactory financial terms
being reached.

 

ii) 
The procurement of services from an agent to assist the Council in
the marketing and sale of the NewShare
portfolio.

 

iii) 
To delegate authority to the Corporate Director of Resources in
consultation with the Cabinet Member for Finance and Corporate
Services to award the services contract to the agent post
tender.

 
Alternatives
Considered
 

a) 
Do Nothing - Continued management of the
NewShare portfolio. This option was
discounted due to the inefficiencies in retaining and managing what
is, in effect, a small equity loan portfolio nor is it something
that the Council has expertise in managing.

 

b) 
NewShare’s
stated aim was to assist Newham residents to access
affordable home ownership, however this is not in line with the
Council’s current strategy to increase the supply of social
rented and other affordable housing schemes for its
residents.