Shared ownership the only route to home ownership?


06 October, 2016

For years, shared ownership (in various guises), along with right to buy and acquire, have been the main routes to homeownership for clients of registered providers. But RPs are increasingly looking for different variations on the theme, especially in light of the current property market and HCA's Shared Ownership and Affordable Housing Program for 2016-2021 (in which funding is exclusively available for sales).

Arguably, the most high-profile variation on the theme of homeownership is that of government backed 'Starter Homes' which, the government claims, are set to replace shared ownership sales and/or affordable housing obligations in s. 106 Agreements - although since the passing of the Housing and Planning Act 2016 there has been very little information provided on the proposed new tenure.

However, aside from Starter Homes, an ever-growing number of housing associations are promoting schemes of their own invention.

One such scheme is Gentoo's "Genie" the scheme was officially axed in March 2016 but recently there have been rumours of its resurrection. Genie allowed renters 'to build up equity in a home without a deposit' (specifically by purchasing shares in the property over successive 5-year periods with agreed monthly payment plans) and was taken up by almost a hundred properties in the North East during the 5 years it was available to Gentoo's tenants. Unfortunately, attempts to roll out the scheme across the country were unsuccessful. In early September, Inside Housing suggested the scheme may be brought back but Gentoo refused to comment.

Gentoo are by no means the only housing provider to offer a different option to the usual homeownership schemes.

With another fresh take on the issue of homeownership, Home Group have recently announced their 'graduated ownership' scheme, intended to help those set to miss out on Right to Buy. In their press release Home Group commit to 'match, pound for pound, the Government cash bonus to savers using a Help to Buy ISA to save for a mortgage deposit.' Customers may also benefit from a house price inflation freeze for up to five years whilst saving for deposits. Under the scheme, tenants are encouraged to open Help to Buy ISAs with the government's contribution being matched by Home Group. However, the real innovative is that tenants can opt for a 'reduced service' in which they carry out some of their own repairs and maintenance and in return Home Group charges a lower rent, to enable tenants to save for a deposit.

Mayor of London Sadiq Khan announced recently that his 'London Living Rent' product is to be altered 'to enable medium-income earners to buy a home at the end of their tenancy, in a concession to the government's homeownership drive.' The details of Mr Khan's plans are a little vague at the moment but options cited so far include paying a sub-market rent to allow tenants to save for a deposit or allowing renters to purchase a share of their home after a 15-year tenancy. It is yet to be seen how the Mayor of London intends to take his scheme forward.

Although not strictly a homeownership scheme, special mention should go to midlands based Bromford and their 'Bromford Deal'. Although the details of the 'the deal' differ for each tenant, the crux is that all tenants, when signing up to a Bromford tenancy, discuss their goals and aspirations over the coming months and years and then commit to achieving those goals. Tenants are then encouraged to be more independent by carrying out their own repairs or becoming more involved in the community in which they live.

This is by no means an exhaustive list and at Forbes we are always interested to know about fresh, new ideas. If there's a particular scheme you like that we haven't mentioned - let us know! We're planning a breakfast briefing on the topic of homeownership schemes and would love for you to attend/let other RPs know about your RP's innovative products - stay tuned for details.


Make an enquiry