Reply To: High Base Rent for Supported Scheme


Thanks Both
So further information obtained regarding this:
Property is a 3 bed – developer purchase price is £500k
Resale to Pension Provider is £845k (development costs were 157,500)
I asked about profit for pension provider and the response was that all profits received go to deliver Local authority pension funds.
It is quite clear from the info provided that the proposed tenant has high functioning autism and does require a facility suitable to their high needs. The plans for the property shows one bed with attached wet room, sensory room, kitchen, dinning room, living room, bedroom for support worker (en suite) and a utility room.
The CIC are being pushed by the NHS as the current accommodation is deemed unsuitable.
I had previously pointed out that we have no rents remotely close to this figure and therefore this is why I did not feel we could support this using HB.
The property in question has been sourced especially for the tenant and commissioned by the NHS and integrated care board.
I have been told that whist it is accepted that the lease cost is high it is cheaper than any secure alternative that may be required due to the needs of proposed tenant. Hospital care has already been ruled out as being a viable long term alternative.
I am being pushed by the CIC as they are being pushed by the NHS and the developers as they think they will lose the property.
They have asked if we can ‘agree’ to this or is there a total we will go to.
With regard to the 7% – I enquired if lower values had been considered – the response was that 7% has always been the case despite the current increases in loans etc
not sure if any of this helps but I am still concerned even though I think a full subsidy reclaim would be viable?