Discounted Market Sale

advertisement
Increasing Access to Home
Ownership in Barnet
Brian Reynolds
Deputy Chief Executive
London Borough of Barnet
Reviewing the Housing Strategy
• Providing greater choice and increased access to
low-cost home ownership
• Meeting the needs and aspirations of older people
• Continue to tackle homelessness and reduce the
use of temporary accommodation
Housing Needs
•
Housing Needs Survey - shortfall of 5,148
affordable housing units per annum
•
Research shows that most people aspire to own
their own home
•
40% of first time buyers buy with help from
family/friends
Ownership Options in Barnet
• Social Homebuy Scheme for Council Tenants
• Cash Incentive Scheme
• Shared Ownership
• Discounted Market Sale
• First Time Buyers initiative
• Housing Advice for potential owners
Social Homebuy Scheme
• Allows existing tenants to acquire an equity share in
their own home
• Minimum share 25%
• Landlord can charge up to 3% on retained equity
• Barnet Scheme:
– Keeps rent low at 2.5% of equity
– Major repairs charges pro-rata for first 5 years
Social Homebuy Scheme
Cash Incentive Scheme
2-5 years tenancy
2+ bedrooms
5+ years tenancy
2 bedrooms
3+ bedrooms
£18,000
£26,000
£29,000
• Provides a cash grant to help tenants buy a property
on the open market
• 18 tenants moved under scheme in 2006/7
Shared Ownership
• Government funded part-buy/part-rent scheme,
operated by Housing Associations
• Allows people to buy a minimum 25% share in a
home and pay a subsidised rent on the remainder
• 33 shared ownership sales, including both new
build and existing properties, were completed in
2006/’07
• The properties included 3 x 3 bed, 21 x 2 bed, 7 x
1 bed and 1 studio
Shared Ownership - Access
Total
Unable to Able to
% Unable
Tenure
Households afford
Afford
to afford
Affordability of shared ownership with 50% equity and tenure
Council
11,008
10,842
166
98.50%
RSL
6,034
5,977
57
99.10%
Private rented
20,370
17,614
2,756
86.50%
TOTAL
37,412
34,433
2,979
92.04%
Affordability of shared ownership with 25% equity and tenure
Council
11,008
10,471
537
95.10%
RSL
6,034
5,977
57
99.10%
Private rented
20,370
16,536
3,834
81.20%
TOTAL
37,412
32,984
4,428
88.16%
Source – Barnet Housing Needs Survey 2006
Shared Ownership - Money
New Build
Beds Full Price
50% Equity Share
1
£199,000
Annual
Mortgage
@ 5.89%*
£5,876
Annual
Rent
@3%
£2,985
Total
Annual
Cost
Income
Required
(3X Total
Cost)**
£8,861
£26,583
£3,690 £10,918
£32,754
2 £246,000
£7,228
3
£301,500
4
£415,500
25% Equity Share
1
£199,000
£8,892
£12,220
£4,523
£6,233
£13,415
£18,453
£40,244
£55,358
£2,912
£4,478
£7,390
£22,169
2 £246,000
£3,640
£5,535
£9,175
£27,525
3
4
£301,500
£4,420
£6,784
£11,204
£415,500
£6,136
£9,349
£15,485
* Interest only
** Method used by Metropolitan Home Ownership
£33,611
£46,454
Discounted Market Sale (DMS)
• Available via St George only
• The purchaser pays 80%; the discount is protected
by a covenant on the property, held by the Council
• Thirteen applicants are so far purchasing under this
scheme
• The planned provision is for 240 homes
Discounted Market Sale
Tenure
Total
Households
Unable to afford
% Unable to
afford
Able to Afford
Affordability of low-cost market housing at no discount by Tenure Type
Council
11,008
10,972
36
99.7%
6,034
6,034
0
100.0%
Private rented
20,370
19,327
1,043
94.9%
TOTAL
37,412
36,333
1,079
97.1%
RSL
Affordability of low-cost market housing at a 20% discount by Tenure Type
Council
11,008
10,972
36
99.7%
6,034
6,034
0
100.0%
Private rented
20,370
19,327
1,043
94.9%
TOTAL
37,412
36,333
1,079
97.1%
RSL
Affordability of low-cost market housing at a 30% discount by Tenure Type
Council
11,008
10,921
87
99.2%
6,034
5,977
57
99.1%
Private rented
20,370
18,491
1,879
90.8%
TOTAL
37,412
35,389
2,023
94.6%
RSL
Affordability –
Discounted Market Sale
New Build
Discounted @ Household Income Required
Full Price
Beds
20% 1 Earner
2 Earners
£199,000
1
£159,200
£45,486
£54,897
£246,000
2
£196,800
£56,229
£67,862
£301,500
£415,000
3
4
£68,914
£94,857
£83,172
£114,483
1
£241,200
£332,000
30%
£139,300
£39,800
£48,034
2
£172,200
£49,200
£59,379
3
4
£60,300
£83,000
£72,776
£100,172
1
£211,050
£290,500
40%
£119,400
£34,114
£41,172
2
£147,600
£42,171
£50,897
3
4
£180,900
£249,000
£51,686
£71,143
£62,379
£85,862
Mortgage Multipliers
1 Earner = 3.5
2 earners = 2.9
Barnet HNS 2006
First Time Buyers Initiative (FTBI)
• Launched on Beaufort Park for 50 new build
apartments
• 5% cash deposit + mortgage to at least 45% of
value, with nothing to pay on balance for first
three years
• Currently 31 buyers purchasing under this
scheme
Households
Housholds securing
securinglow
lowcost
costhome
home
ownership in 2006/7
Scheme
H/Holds Helped
Shared Ownership
33
Open Market Homebuy
11
Discounted Market Sale
13
First Time Buyers Initiative
31
Right to Buy
22
Right to Acquire
6
Cash Incentive
18
Total
134
Target by 2010
1000
Future Supply
• There are currently 324 shared ownership
properties with planning permission
• It is anticipated that 510 low cost home ownership
properties will be built on the regeneration estates
• 227 Discounted Market Sales properties will
become available and a further 19 FTBI properties
• Cash incentive is programmed at 20 per year,
while other schemes are subject to demand
• This results in a future supply of at least 1080 new
build low cost home ownership properties
Advice
• Booklet developed for those wanting information
about home ownership
• Reaching out: community events; Sharia Mortgages
• Working with Barnet Homes to provide more advice
for council tenants
Conclusions
• Discounted Market Sale provides a simpler product
and an opportunity for some people at the higher end
of the intermediate market to purchase
• Shared ownership provides an opportunity for more
people to access homeownership, but rents need to
be kept as low as possible as property values
increase
• Need new, simple products
• Need to tackle higher interest rates for low cost
home purchasers
Your response
• How much do you know about your tenants’
aspirations (and capacity) for home ownership?
• What range of low cost home ownership products
are available to tenants in your local area?
Download
Related flashcards

Economic indicators

17 cards

Economic theories

19 cards

Russian economists

23 cards

Create Flashcards