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Housing help
Even if you can’t afford to buy property in one fell swoop,
you may still be able to take that important step onto the housing
ladder. Too good to be true? Maybe, but there is help out there
to enable you to do just thatk
Housing
associations have been around for years, but they do not widely
publicise their service. They are the main providers of new social
housing and are also known as ‘social landlords’. There
are over 2,000 housing associations in England, which currently
manage around 1.45 million homes and which house at least twice
that many people.
Housing associations are run as businesses but do not trade for
profit. Any surplus is ploughed back into the organisation to maintain
existing homes and to help finance new ones. They are run to help
you.
How to become a housing association tenant
Generally, people housed by housing associations are those
defined as being in ‘housing need’. However, housing
associations have differing eligibility criteria depending on your
needs and the demand for housing, so you should contact your local
authority or local associations if you have a housing need.
All housing associations must have written policies on the type
of housing services they provide, who can apply for housing and
how applications will be considered. Housing associations take the
ma-jority of their new tenants from local authority waiting lists,
so contact your local authority housing department in the first
instance.
Housing associations provide housing for many different sectors
of the community. They always seek to help the most disadvantaged.
These may be people who cannot get local authority housing because
there is not enough, or because they do not qualify. Other associations
may specialise in providing housing for younger single people, or
for those who need special support – for example, people with
mental illness or drug problems. Some associations build homes for
low-cost homeownership. In these schemes, the buyer owns a proportion
of the home and rents the remaining share from the association.
How they help
There are two schemes part-funded by the Housing Corporation,
which run these ‘social landlords.’ These schemes aim
to help people on lower incomes to become home-owners. They are:
c The Shared Ownership scheme, through which you buy a share of
the property and pay a rent on the remaining share you do not own;
and
•The Homebuy scheme, which helps people to buy a home on the
open market.
It is also possible for some housing association tenants to purchase
the homes that they are currently renting through two schemes:
•The Right to Acquire scheme gives eligible tenants of registered
social landlords the legal right to buy the home they currently
rent; and
•The Voluntary Purchase scheme, under which tenants of housing
associations may be able to apply to buy the home they rent at a
discount.
Shared ownership schemes
This scheme allows you to purchase a share of a property from a
housing association. The share you purchase is funded by a mortgage,
which you will need to arrange with a bank or building society.
The remaining share you do not own is rented from the social landlord.
The size of the share to be purchased will depend on your income
and savings. Normally applicants buy a 50 per cent share, but you
may purchase a smaller or larger share (to start with, you can buy
as little as 25 per cent or as much as 75 per cent). The higher
the share you purchase, the less rent you will have to pay. You
will also have to pay a service charge when you buy a flat. Later
on, if you wish and can afford to do so, you can buy a further share.
The monthly rent will be a proportion of the total rent the property
would fetch, calculated by the social landlord based on the proportion
of the share you do not own. For example, if you own a 50 per cent
share, you would pay 50 per cent of the total rent. This rent will
take into account the repayments you make as an owner-occupier,
and your share of any insurance, maintenance and repairs. It will
therefore be less than the normal rent you would pay if you were
renting the whole property. The rent will usually be reviewed every
year.
The scheme is intended for people who cannot afford to buy a suitable
home in any
other way. They must be in housing need and be unable to afford
outright purchase. Priority will normally be given to existing public-sector
tenants or those on local authority or social landlords’ waiting
lists.
Although you have not bought the property outright, you will have
the normal rights and responsibilities of a full owner-occupier.
Shared ownership homes may be new or renovated flats or houses which
are sold by social landlords. Prices vary according to location
but are expected to be within the means of those people who cannot
afford the prices of properties available for sale in the open market.
You may sell at any time but must tell the social landlord in writing
that you want to move. You can either sell the part that you own
or buy the remaining share and then sell the property outright.
You will benefit from any increase in the value of the property
according to the share you own, but you should be aware you may
be affected by any fall in values.
Unless you own the property outright, clauses in the lease may enable
the social landlord to nominate prospective buyers and to restrict
the sale price to an independent valuer’s valuation. The reason
for this is that they wish the property to remain available to the
people for whom shared ownership is intended.
Homebuy
The Homebuy scheme helps people to buy a home on the open
market. The scheme is operated by selected housing associations
in England.
By helping some people to buy, the scheme frees up their homes for
rent by others who are in need of housing. So the only people who
can apply for the scheme are:
• Existing tenants of registered social landlords and local
councils; or
•Those on housing waiting lists who are nominated by their
local council as being in housing need.
The money available for Home-buy is limited, so not everyone wishing
to take part can do so. Where the scheme is available, registered
social landlords will operate a waiting list if the demand for the
scheme exceeds the money available.
If you qualify for the scheme, you will need to contribute 75 per
cent of the purchase price of a home through a mortgage from an
approved lender and personal savings. The registered social landlord
will lend you the remaining 25 per cent.
There are no monthly payments on the loan from the registered social
landlord that covers 25 per cent of the purchase price. Instead,
you repay it when you sell the home. The amount you repay will be
25 per cent of the value of the home at the time you sell it. If
you want to, you may repay the loan before you sell, in which case
what you repay will be based on the value of your home when you
pay back the loan. It is important to remember that the loan must
be repaid when you sell the home.
These are the main schemes available to which some of you will be
eligible. Some of the schemes are also offered to those not on housing
association lists, so it is worth contacting your local office to
check.
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