£188m valuation of Shropshire Council homes ‘not accurate’
A £188 million valuation of Shropshire’s council houses “does not reflect” the price the authority would receive for their sale, an official has saidaccording to the organisation.
The future of the council’s housing stock remains uncertain with the authority yet to publish the findings of a report by property experts Savilles public.
Shropshire Council owns about 4,000 homes which are under the management of Shropshire Towns and Rural Housing (Star Housing).
The homes are in Bridgnorth and Oswestry and the Savilles report was commissioned to look at options for the future management of the houses. It is expected to have considered whether a sale would be beneficial.
The most recent valuation of the homes from March put the price at £470.5 million, although that figure does not reflect the true value as it is the assessment based on vacant homes at open market value.
The more accurate value is “existing use” figure, which came out at £188.2 million and includes the protected tenants and tenancies.
But that amount is not the figure the council would receive for any sale as it fails to include a number of factors such as historic housing debt or the condition of the homes.
Andy Begley, the council’s director of adult social care and housing, said: “The latest valuation of Shropshire Council’s housing stock is £470.5m and it is a valuation provided by the District Valuation Service for resource accounting purposes only, in the council’s statement of accounts. Of particular importance to note is that it is a valuation of the council’s stock based on full open market value, that is with no occupancy restrictions and with vacant possession.
“As part of the same accounting methodology, is the housing stock valuation as its existing use, with existing and continuing fully protected tenants and tenancies. This valuation is £188.2m is based upon a desk top standard regional percentage (40 per cent) of the open market valuation.
“It is important to note that this is a particular prescribed accounting methodology valuation based upon individual property sale values, which does not reflect the stock debt, stock condition, local market conditions or the value of a whole stock purchase to any potential organisation.”
Speaking in July Councillor Lee Chapman, Shropshire Council’s cabinet member for health and adult social care, said the Savilles report was being reviewed and that any recommendation on the future of the homes would go before the authority’s cabinet.
He also said the priority is to make sure Shropshire’s housing is “fit for the future”.
He said: “Earlier this year we commissioned Savills to carry out an assessment and produce options on our behalf with regards to the housing stock we own.
“It is really important that the county’s housing is fit for the future and this was the main driver behind getting Savills in to assess what we have.
“A report which outlines their recommendations is now complete. No decisions have yet been made and, at this moment in time, we are simply exploring the options the report proposes.
“The report will be subject to a formal decision-making process, which will include consideration by cabinet in the near future.”