Alternative Housing Provision
Housing Directors' Meeting21 October 2015
Richard McQuillan
Head of Housing Services
Hafod Housing Association
Background Hafod Housing Association provides
& manages a range of housing models outside the standard SHG model: Low Cost Home Ownership Shared Ownership Flexi Tenure (for the elderly) Rent First – Buy Later Intermediate Rent Homeless leasing (Not covering) Social lettings (Not covering)
Low Cost Home Ownership (LCHO)
• Traditional approach 70/30 ownership• Sell property for 70% of the market
value• Association retain 30% equity in the
property• No charges related to 30% equity• No time limit on redeeming 30%
equity
LCHO Challenges
• Local Authority Partnerships– Identifying potential buyers– Local connection criteria– Affordability
• Market Vs Sector Approach– Marketing via a waiting list
• Securing a Mortgage– Savings– Other costs
• Market Prices in some areas pushing up LCHO prices
LCHO Challenges Cont.
• Developers attitudes towards Section 106:– Not sure of standard of property handed over– Advance marketing can be difficult– Additional costs for turf, carpeting, white
goods, door numbers!
• Managing Service Expectations:– Out of hours viewings– Weekend open days– Quick response to defects etc.
Shared Ownership
• Part Owned / Part Rented• Percentage of ownership can vary• Owner can staircase up to full
ownership• Not seen as a great deal for buyers• Full repairs responsibilities with the
owner• No longer pursuing this model
Shared Ownership Challenges
• Some tenants struggling to pay rents & mortgages
• Historic issues of tenants not understanding financial implications investing in a property
• Monitoring condition of the property– Some tenants not investing in their home
• Increased house prices & economic climate– Lower rate of tenants staircasing to 100%
ownership
Flexi-Tenure• One scheme in a Cardiff (Sheltered
Scheme for the Elderly)• Part Owned / Part Rented• Owners can reduce equity in the
property as well as increase their equity stake.
• Owners can purchase up to 95% of the property.
Flexi-Tenure Observations• Combined Rents & Service Charges
can by high even at 95% ownership:– Low rental element– Service charges for Sheltered Scheme not
cheap
• Popular scheme:– Desirable location - Near Roath Park Lake
Cardiff – No difficulties for tenants to sell
Rent First – Buy Later• Only managing two schemes• Intermediate (LHA) rents set to allow for
the saving towards a mortgage• Valuation taken at the start of the tenancy• Valuation taken when tenant choose to
buy• The difference in valuation is shared
between the Association and the tenant• Can’t sell below purchase & works /
acquisition costs
Rent First – Buy Later Challenges
• Confusing for tenants - No guarantees of ‘discount’ offered
• Purchase & works costs can exceed local house prices (low value areas)
• Difficulty saving for mortgages:– Other financial priorities– Tenants often ‘dip’ into savings– Change of economic / personal
circumstances
Intermediate Rent• Welsh Housing Partnership (WHP)• Funded through Association Reserves, Loans &
Grant• Increase supply of affordable homes• Rent level set at Local Housing Allowance
(LHA) rate• Help those:
– Unable to buy– Struggling to pay market rents in the private sector– Not able to access social housing
• Over 260 units
WHP Challenges
• Increasing house prices create challenges to procuring properties at the right price
• Keeping improvement costs to budget – unexpected works
• Ensuring the model financially stacks up – easier in higher LHA level areas
• Trying to please all our local authority partners
• Local authority partners having own agendas
Welsh Housing Partnership
• Scattered units or new development• Popular with tenants:
– Cheaper than market rents in PRS– Good quality accommodation– No stigma of ‘social rented’ housing
• Association benefits– Low turnover– Low rent arrears– Low repair costs
Any Questions?
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