RSLs cautious over Social HomeBuy

7 Apr 05
Social landlords are offering only qualified backing for Deputy Prime Minister John Prescott's flagship scheme to extend home ownership, the National Housing Federation has warned.

08 April 2005

Social landlords are offering only qualified backing for Deputy Prime Minister John Prescott's flagship scheme to extend home ownership, the National Housing Federation has warned.

Helen Williams, head of neighbourhoods and sustainability at the federation, said housing associations were behind the principle of ownership but had to assess whether they could afford to replace homes lost through Social HomeBuy and still meet the decent homes target.

'Whether it takes off on the ground depends on what model emerges and the ability of associations to continue their investment plans,' said Williams in response to a consultation paper launched by the Office of the Deputy Prime Minister on April 1.

Spurred on by government-funded discounts, an estimated 300,000 council and housing association tenants who are ineligible for right to buy could opt to buy shares in their home prior to outright purchase.

Ruth Lucas, housing policy manager at the Local Government Association, said Social HomeBuy should be more attractive to councils than right to buy because they can keep all receipts. But, she added, councils would wish to check that tenants could afford the long-term costs of being a homeowner.

Although landlords will also have first option to buy back properties, only one out of every two homes sold will be replaced. Social housing in rural areas with fewer than 3,000 homes will be excluded, along with sheltered housing for elderly people.

HomeBuy: expanding the opportunity to own also attempts to iron out confusion over the growing range of home ownership initiatives by placing everything under the HomeBuy brand.

Schemes aimed at key workers and other first-time buyers, including equity loans and shared ownership, will be renamed New Build HomeBuy or Open Market HomeBuy, depending upon whether they involve new or existing properties.

The ODPM is holding talks with the Council of Mortgage Lenders over an extension of equity loans using private finance that could help a further 20,000 first-time buyers take up New Build or Open Market HomeBuy.

David Butler, chief executive of the Chartered Institute of Housing, said such schemes must not be at the expense of homes for rent. 'We won't support proposals which switch resources for much needed new social housing to pay for Social HomeBuy discounts,' he said.

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