Affordable Home Ownership Conference and Exhibition
Affordable Home Ownership Conference and Exhibition B2: To buy or not to buy – the move from renting to home ownership Speakers:
Siobhan Larking Team Leader, Right to Buy Policy Team Communities and Local Government Steve Hicks Chief Operating Officer Gentoo Group
Chair:
Levi Harris Head of Relationship Management Catalyst Housing
Right To Buy To buy or not to buy – the move from renting to home ownership
“This government doesn't just talk about expanding home ownership: we're making it happen.” Prime Minister, March 2012
Reinvigorating Right to Buy
• Giving a new generation of social tenants the opportunity of home ownership. • Every additional home sold under Right to Buy will be replaced by a new home for affordable rent.
The New Regulations • From 2 April the Right to Buy discount increased - the maximum discount cap for tenants is now £75,000. • This will more than quadruple the discount cap in London and triple it in most other parts of the country.
Why revisit Right to Buy? • Since being introduced in 1980, Right to Buy has helped nearly 2 million households purchase their own home. • But sales fell dramatically in recent years – from 84,000 in 2003/04 to 3,700 in 2010/11.
Who can benefit?
• Tenants who have the Right to Buy or Preserved Right to Buy qualify for increased discounts. • New occupants of affordable homes built with the proceeds of Right to Buy sales
What does this mean for Housing Associations?
• Tenants applying with Preserved Right to Buy
• Right to Acquire • Business impact • Receipts
Support for tenants
• Measures in place to prevent abuses, particularly in relation to sale and lease back schemes. • Clear information on home ownership costs and responsibilities so tenants can make informed decisions.
How are we informing tenants? Press ads, posters, leaflets and booklets
Facebook and Directgov
Web banners Contact details can be tailored by LAs
Informing tenants (continued) We are currently developing a national communications campaign which includes: • • •
Letters and advertorial in newspapers Out-of-home advertising (such as posters on bus stops) Regional radio.
We are investigating other ways of ensuring tenants are informed such as additional targeted letters and mailings. Trialling will roll out first in the West Midlands and London and then nationally. We are currently planning the next stage of communications activity.
Impact on existing home ownership schemes?
The Government has committed to supporting people to achieve their aspirations and feel the pride of home ownership.
Other home ownership options available include: • Shared ownership • FirstBuy
Mortgage availability •
The Government recognises the challenges
•
the difficulties lenders have faced in lending at a high loan to value (95%)
•
Mortgage lenders are prepared to treat the discount towards the deposit
•
Mortgage companies will want to assure themselves that they are lending to people in a sustainable way.
•
Fact sheet for Lenders was published 12 March
Right to Buy Receipts
• Admin costs • Paying off debt on the property sold (allowing for the adjustment in the SelfFinancing settlement) • Assumed income to local authorities (i.e. what they would have kept under the old system)
• Assumed income to HMT (i.e. what they would have kept under the old system)
Receipt handling and 1:1 Replacement • Agreements must be returned by 27 June. • Aim to spend no more than 30% of receipt on replacement stock. Remaining 70% should be found from reserves or borrowing.
• Spending needs to be committed within 3 years • Receipts can alternatively be returned and recycled through a bidding process
For further information
• Any questions or queries can be sent to [email protected]
• Any requests for material should be sent to [email protected] • Further information can be found on www.communities.gov.uk/rightbuy and www.direct.gov.uk/righttobuy • www.facebook.com/righttobuy
Affordable Home Ownership and Intermediate Housing To buy or not to buy – the move from renting to home ownership
Steve Hicks – Chief Operating Officer Gentoo Genie
Dysfunctional Market Since the economic downturn and the global credit crunch the availability of mortgage finance to first time buyers has reduced
First Time Buyers
Political Environment “These plans are designed to spread opportunity in our society. For too long, millions have been locked out of home ownership. We want to build an economy that works for everyone, one in which people who work hard and play by the rules can expect to own a decent home of their own.“ The Prime Minister and Deputy Prime Minister.
The need for Innovation
Roman Times
Why Genie?
Property Example 31 Calshot Road
Property Sales value Initial monthly residency fee
Annual % increase in residency fee Term plan(Months) Administration fee (Exc VAT)
£140,000 £690
3% 300 £600
What is Genie?
Brand Advertising
Latest statistics following launch 17th October • 143 applications received 70% at affordability in principle stage 32% at full application stage • 9 properties reserved
• 40 properties completed • 50% are in the 20-30 age group
Investment
What Next?
100 Genie Properties £12 m invested
Grow the fund to £100m ??
Contact Details
Steve Hicks Chief Operating Officer Direct Line:
0191 525 5085
Mobile:
07775 552 508
Email:
[email protected]
Affordable Home Ownership and Intermediate Housing To buy or not to buy – the move from renting to home ownership Steve Hicks – Chief Operating Officer Gentoo Genie
Siobhan Larking Team Leader, Right to Buy Policy Team Communities and Local Government Steve Hicks Chief Operating Officer Gentoo Group
Chair:
Levi Harris Head of Relationship Management Catalyst Housing
Right To Buy To buy or not to buy – the move from renting to home ownership
“This government doesn't just talk about expanding home ownership: we're making it happen.” Prime Minister, March 2012
Reinvigorating Right to Buy
• Giving a new generation of social tenants the opportunity of home ownership. • Every additional home sold under Right to Buy will be replaced by a new home for affordable rent.
The New Regulations • From 2 April the Right to Buy discount increased - the maximum discount cap for tenants is now £75,000. • This will more than quadruple the discount cap in London and triple it in most other parts of the country.
Why revisit Right to Buy? • Since being introduced in 1980, Right to Buy has helped nearly 2 million households purchase their own home. • But sales fell dramatically in recent years – from 84,000 in 2003/04 to 3,700 in 2010/11.
Who can benefit?
• Tenants who have the Right to Buy or Preserved Right to Buy qualify for increased discounts. • New occupants of affordable homes built with the proceeds of Right to Buy sales
What does this mean for Housing Associations?
• Tenants applying with Preserved Right to Buy
• Right to Acquire • Business impact • Receipts
Support for tenants
• Measures in place to prevent abuses, particularly in relation to sale and lease back schemes. • Clear information on home ownership costs and responsibilities so tenants can make informed decisions.
How are we informing tenants? Press ads, posters, leaflets and booklets
Facebook and Directgov
Web banners Contact details can be tailored by LAs
Informing tenants (continued) We are currently developing a national communications campaign which includes: • • •
Letters and advertorial in newspapers Out-of-home advertising (such as posters on bus stops) Regional radio.
We are investigating other ways of ensuring tenants are informed such as additional targeted letters and mailings. Trialling will roll out first in the West Midlands and London and then nationally. We are currently planning the next stage of communications activity.
Impact on existing home ownership schemes?
The Government has committed to supporting people to achieve their aspirations and feel the pride of home ownership.
Other home ownership options available include: • Shared ownership • FirstBuy
Mortgage availability •
The Government recognises the challenges
•
the difficulties lenders have faced in lending at a high loan to value (95%)
•
Mortgage lenders are prepared to treat the discount towards the deposit
•
Mortgage companies will want to assure themselves that they are lending to people in a sustainable way.
•
Fact sheet for Lenders was published 12 March
Right to Buy Receipts
• Admin costs • Paying off debt on the property sold (allowing for the adjustment in the SelfFinancing settlement) • Assumed income to local authorities (i.e. what they would have kept under the old system)
• Assumed income to HMT (i.e. what they would have kept under the old system)
Receipt handling and 1:1 Replacement • Agreements must be returned by 27 June. • Aim to spend no more than 30% of receipt on replacement stock. Remaining 70% should be found from reserves or borrowing.
• Spending needs to be committed within 3 years • Receipts can alternatively be returned and recycled through a bidding process
For further information
• Any questions or queries can be sent to [email protected]
• Any requests for material should be sent to [email protected] • Further information can be found on www.communities.gov.uk/rightbuy and www.direct.gov.uk/righttobuy • www.facebook.com/righttobuy
Affordable Home Ownership and Intermediate Housing To buy or not to buy – the move from renting to home ownership
Steve Hicks – Chief Operating Officer Gentoo Genie
Dysfunctional Market Since the economic downturn and the global credit crunch the availability of mortgage finance to first time buyers has reduced
First Time Buyers
Political Environment “These plans are designed to spread opportunity in our society. For too long, millions have been locked out of home ownership. We want to build an economy that works for everyone, one in which people who work hard and play by the rules can expect to own a decent home of their own.“ The Prime Minister and Deputy Prime Minister.
The need for Innovation
Roman Times
Why Genie?
Property Example 31 Calshot Road
Property Sales value Initial monthly residency fee
Annual % increase in residency fee Term plan(Months) Administration fee (Exc VAT)
£140,000 £690
3% 300 £600
What is Genie?
Brand Advertising
Latest statistics following launch 17th October • 143 applications received 70% at affordability in principle stage 32% at full application stage • 9 properties reserved
• 40 properties completed • 50% are in the 20-30 age group
Investment
What Next?
100 Genie Properties £12 m invested
Grow the fund to £100m ??
Contact Details
Steve Hicks Chief Operating Officer Direct Line:
0191 525 5085
Mobile:
07775 552 508
Email:
[email protected]
Affordable Home Ownership and Intermediate Housing To buy or not to buy – the move from renting to home ownership Steve Hicks – Chief Operating Officer Gentoo Genie
