Medway Council Considers £45.95m Purchase of 791 Social Housing Properties

Medway Council’s Full Council was asked at its meeting on Thursday 23 April 2026 to approve £45.95 million of additional capital borrowing so that its Housing Revenue Account (HRA) can acquire a portfolio of 791 homes from a registered social housing provider. The report went before members as Item 11, and the debate moved into closed session shortly after 20:30 so councillors could consider commercially sensitive detail in private.

Cabinet had already backed the proposal on 7 April 2026. The recommendation to Full Council was to note Cabinet’s decisions and approve the addition of £45.95 million to the Capital Programme, a figure that includes the £45 million indicative purchase price and associated acquisition fees.

What is in the portfolio

The 791 properties are a mixed portfolio rather than a single estate. The report before councillors describes eleven distinct tenure categories, including general needs homes, affordable rent, sheltered housing, leasehold sheltered flats, shared ownership, leaseholders on Right to Buy freeholds, commercial units, garages, freehold properties with service charges, and communal playground and games areas.

The council’s risk register notes that declining the deal would mean “a missed opportunity to secure 569 affordable homes” — the subset of the 791-unit portfolio specifically classed as affordable housing.

The detailed postcode-level breakdown sits in Exempt Appendix 1 of the report, which is not published for commercial-confidentiality reasons. The seller is a registered provider that cannot currently be named because of a non-disclosure agreement; the report says the provider is pursuing a long-term asset disposal and rationalisation strategy.

How the deal came together

Officers were first approached in late 2025 by an agent, FFT, acting for the registered provider. The provider was running a silent auction across lots in Medway and elsewhere in Kent. Medway Council declined to bid at that stage on the grounds that the timescales were unachievable, but invited the provider back to negotiate on the Medway-only lots. A call followed in early January 2026 with the provider’s Head of Stock Rationalisation and Disposals, after which officers began high-level financial modelling on the Medway portfolio.

Savills was then engaged to run an initial review of the acquisition and its effect on the HRA’s 30-year business plan, modelling the impact at an indicative purchase price of £45 million, with an anticipated transaction date of 1 April 2027.

What the Council’s analysis says

The Savills-assisted modelling, summarised in the report, finds that borrowing at this scale keeps the HRA’s Interest Cover Ratio above the 1.25 minimum threshold across the full 30-year plan. Minimum reserves hold throughout the period, and the business plan anticipates an investment capacity of £124 million by year 30. Stock-condition costs have been stress-tested at £69,000 per unit against a survey assumption of £50,000, and borrowing rates tested up to 5 per cent against a modelled 4 per cent.

The council describes the acquisition as a “rare opportunity” to expand and modernise its housing stock at a cost per unit materially below either buying on the open market or building new homes.

What transfer means for tenants

All properties will transfer tenanted. Existing tenancy terms and conditions will be preserved, and security of tenure will be enhanced to secure tenancies under the Housing Act 1985. On transfer, eligible tenants will receive the Right to Buy — with the significant exception of sheltered-scheme tenants, whose tenancies cannot be bought. The council’s capital investment is protected for 15 years under the Housing (Right to Buy) (Cost Floor) (England) Determination 1999.

Delegations, climate, and next steps

Cabinet has delegated authority to the Director of Place and Chief Operating Officer, in consultation with the Leader of the Council and the Portfolio Holder for Housing and Homelessness, Councillor Louwella Prenter, to authorise the transaction subject to final due diligence. The same Cabinet decision approved the procurement of consultants to support the transfer and due diligence.

Because the incoming stock will sit inside the HRA, it will be maintained under the council’s Asset and Energy Strategy, with works to bring properties to EPC C by 2030 and to carbon neutrality by 2050 built into the business plan.

The report identifies Becs Wilcox, Chief Housing Officer, and Adam Spokes, Head of HRA Property and Development, as the authors. It is brought by Adam Bryan, Director of Place.

Source post on X — @medway_council, Full Council live feed