Affordable Homes And Some Lesser-Known Schemes
We talk to Jessica Hardwick, group affordable housing services director for Connells Group, about giving everyone the chance to have their own roof over their head.
What do we mean when we talk about ‘affordable housing’?
Giving everyone the chance to have their own roof over their head. There are lots of different schemes that make properties ‘affordable’ to purchase, and it’s all about finding which means is suitable for each buyer, dependent on their ability, needs, and requirements at the time.
Does the criteria for affordable housing depend on your geographical location/where you’re looking to buy?
To purchase a Shared Ownership property, a household needs to earn £80,000 per annum or less outside of London, and £90,000 or less in London. There are some Shared Ownership homes that have a requirement for buyers to have a local connection to the village or town that the property is in. This may mean they were from their originally, or live and work there right now.
Can new homes classified as affordable housing ever be bought on a buy-to-let or investment basis?
No, affordable homes must be someone’s main residence, and their only home. The whole point of affordable housing is that it provides a springboard for someone to get on, or back on, to the housing ladder.
What other initiatives have helped new buyers get onto the property ladder in recent months?
The Shared Ownership scheme is massively overlooked and is such a great way for people to buy a home. There is also the lesser-known Older People’s Shared Ownership (OPSO) scheme, which is specifically for the over-55s, and the HOLD scheme, which enables homeownership for people with long-term disabilities. The Help to Buy scheme and the now updated ‘Help to Buy 2’ (that came into effect as of 1 April 2021), have been great for the new build housing market overall. It is also fantastic to see an increasing number of developers offering more low-cost housing on their new developments.
What else do you feel could be done to make more affordable homes available to buyers?
I think the government choosing to make the new Help to Buy scheme only applicable to first-time buyers (FTBs) should help with this, as FTBs make up a large proportion of people who need an affordable home. I also think that local authorities could do more to work together with developers to offer more of their homes as a low-cost housing option.
What are the qualifying checks made on somebody looking to move into affordable housing?
This is housing association specific, and each provider will do their own thorough due diligence, to ensure each person qualifies and is eligible for an affordable home.
This is less of an issue with affordable housing, as the Stamp Duty liability is so small, if any at all, on Shared Ownership homes. However, in the new build market in general, we have seen the highest levels of buyer activity in decades.
Is there ever a danger of creating a feeling of ‘us and them’ in schemes where private residents are living alongside those in affordable housing?
The best new build schemes are tenure blind. This means that the private and affordable housing are mixed in together, and the development then offers a community, rather than segregation. People buying a Shared Ownership property have to save up a deposit and pay the legal and mortgage administrative costs, just like a private buyer would, so they are the same in that sense. The only difference is they are purchasing a share of their home, but in time they could exercise their right to ‘staircase’ and purchase further shares in their home up to 100% ownership.
Which new home schemes with affordable housing are Connells focusing at the moment?
The group is keen to assist housing associations with all their developments. We have vast amounts of experience up and down the country for selling both Shared Ownership and open market sales for affordable housing providers. Our affordable housing offering is huge, from development valuations to providing EPCs, and we can offer providers in this space everything they need from purchasing a site to handing over their final home to a buyer on completion.
What do you predict will happen to UK property prices as we continue to come out of lockdown restrictions this year?
I think this year will see a fairly stable market with prices remaining steady. Buyer interest is outstripping demand at present, but I think this will even out by the summer, and by the end of the year I think we will see things returning to more of a ‘normal’ market.