Section: Housing Finance

Proposals to Restrict Shared Equity Ceiling

Proposed changes to shared ownership scheme rules will bar equity to staircase to 100% in areas of acute housing shortage.

The Communities and Local Government department consultation paper attracted widespread criticism that the restriction could seriously damage take-up of shared ownership schemes. The consultation paper proposes to restrict the ability to buy additional equity shares, known as staircase up, in areas where land is limited, preventing 100% ownership, and, ultimately restricting the potential for selling affected properties on the open market.

The objective is to keep homes affordable 'in perpetuity', similar to rural exception sites. The plans would also bar shared owners from buying their freehold before they purchase 100% of their property.

Critics argue that the restrictions would lead to prospective homeowners thinking twice before getting involved in a shared equity scheme in a restricted area.

Consultation on the document - Shared Ownership and Leasehold Enfranchisement - ends on 19 October.

Shared Equity Competition Shortlist

Twelve new shared equity proposals, which aim to help more people on low incomes onto the housing ladder, have been shortlisted following the successful first phase of the shared equity competition.

The competition was launched by the then Chancellor Gordon Brown in March this year. It aims to offer a wider choice of shared equity mortgages for homebuyers through the Open Market HomeBuy scheme. The scheme aims to provide affordable and sustainable equity loans, funded by the Government and other lenders, for households who are unable to buy outright due to the presently prohibitive cost of the housing market.

The Housing Corporation received 32 expressions of interest from a whole range of organisations, from banks and building societies to housing associations and developers.

Following a full assessment, 12 bidders have been invited to submit outline proposals.

Some potential ideas include:

Developing products that allow customers to buy on the open market at lower shares - potentially as low as 50%, so reducing the income needed to enter the housing market;
Simplifying products on offer, with the ability of sole providers to set a lower rental charge;
Joint venture structures, which will bring more low cost homes forward.

Regenter Joins Select SHG Group

Regenter pre-qualified for the Housing Corporation's National Affordable Housing Programme (NAHP). This will enable Regenter, a key investor in and deliverer of community based regeneration projects, to bid for the Housing Corporation's social housing grant (SHG) in order to deliver new affordable housing when the bidding process opens in September 2007.

Scheme-based bids for SHG will be assessed on value for money and strategic fit grounds, and, where a bid is successful, schemes will need to be delivered by 2013.

Regenter shareholders, John Laing and Pinnacle Regeneration Group, will establish a separate jointly-owned company as a private sector landlord of affordable homes secured with grant funding. In contrast to the Corporation's current non-RSL partners, this company will own, fund and manage the housing stock over the long term rather than transferring units to an RSL after drawing down grant.

Steve Trueman, Director of Housing Investment at Regenter, said:

"Regenter's ability to bid for social housing grant, together with Pinnacle's accreditation by the Corporation in January this year as a housing and neighbourhood service provider, means that we are in a position to move forward with our plans to own, fund and manage affordable housing as a long term, private sector proposition.

"We will apply an integrated approach to bidding schemes which involve the re-planning of estates and the re-provision of homes on a mixed tenure basis. Regenter can refurbish and build new homes for the local authority, build new homes for sale and now provide non local authority owned affordable housing all within the 'family' of companies."

The Corporation currently have eight "non RSL" or private sector investment partners receiving SHG through the 2006-08 NAHP. Pre-qualification gives Regenter the opportunity to join this select group.

Section: Housing Finance

Proposals to Restrict Shared Equity Ceiling

Shared Equity Competition Shortlist

Regenter Joins Select SHG Group

Housing Monthly Diary

Reporting on July 2007

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