RSLs agree to support HomeBuy

18 Aug 05
Housing associations have withdrawn their objections to a government scheme for extending home ownership after ministers gave them guarantees over rent income and protection for tenants.

19 August 2005

Housing associations have withdrawn their objections to a government scheme for extending home ownership after ministers gave them guarantees over rent income and protection for tenants.

Two months ago, the National Housing Federation warned that Social HomeBuy, under which tenants will buy shares in their homes, could threaten the financial viability of registered social landlords.

But when details of the scheme were unveiled by the Office of the Deputy Prime Minister on August 11, the federation said it was fully behind it and was confident that thousands would snap up the opportunity to own their home.

Associations will now be able to charge rent on the full amount of unsold equity in a property while tenants will be allowed to purchase as little as 25% of their home.

The ODPM has also scrapped plans to allow tenants with shares in their home to defer rent payments for five years. This could have led to sudden rent hikes in the future, claimed the federation.

David Orr, the NHF's chief executive, said the changes had resulted from long and intense discussions. 'We are delighted that our negotiations with the government have led to the development of HomeBuy so that it genuinely reflects the needs of prospective buyers and housing associations who will deliver the service,' he said.

Social HomeBuy will be available to council tenants as well as those renting from housing associations. Landlords will use part of the receipts to build new social housing.

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