LOW COST HOME OWNERSHIP

Introduction
Since 1979, successive governments have sought to increase home ownership by actively promoting it within public sector housing. In 1980, the Right to Buy was introduced to assist tenants in council housing to buy their homes at a discount. In 1996, a similar right was extended to tenants of housing associations under the Right to Acquire procedure for properties built with grants approved by the Housing Corporation on or after 1st April, 1997. Before then such tenants were encouraged to purchase properties on the open market through the government’s Tenants Incentive Scheme. In addition, the government introduced Voluntary Purchase Grant, enabling tenants dwelling in properties built with grants approved before 1st April, 1997 to purchase their current homes. Other home ownership initiatives included Homebuy, Do-it-Yourself Shared Ownership (which has now been replaced by Homebuy), conventional Shared Ownership and Starter Home pilots.
  
Registered Social Landlords (RSLs) have to follow the government’s agenda in satisfaction of the funding requirements that shape their stock acquisition and management. Given the political climate, the desirability of home ownership amongst social housing tenants and the escalating difficulty of affordable housing for first time buyers, Manningham Housing requires a strategic approach to low cost home ownership. This strategic approach is outlined here in the form of a model marketing strategy.
  
Manningham's Aims & Objectives
Manningham Housing Association is pursuing the provision of low cost home ownership to:

• Offer two distinct choices to our customers: affordable renting for those who wish to rent and affordable owning for those who wish to step on the ladder of home ownership through low cost home ownership.
• Foster a mixed tenure on our housing schemes, wherever applicable, in order to strengthen social cohesion, promote sustainability, and ensure diversity.
• Widen the Association’s strategic influence and scope in the District in relation to the provision of affordable housing, in particular, for BME communities, and meeting the wider demand for housing within the context of urban regeneration and community cohesion.  

RIGHT TO ACQUIRE
This scheme was introduced in the Housing Act 1996, and gives certain tenants of Registered Social Landlords (RSLs) (e.g. housing associations) a statutory right to buy their home at a discount, generally between £9,000 - £16,000 depending on the local authority area. It only applies to RSL properties built or purchased with public funds or transferred from a local authority after 1 April 1997, subject to certain exceptions. Eligible tenants must have spent a total of two years as a public sector tenant. The discount is funded by a grant from the Housing Corporation. Sales receipts are required to be recycled to provide replacement housing for rent.

The applicable discount for Bradford is £9000.

VOLUNTARY PURCHASE GRANT
The Voluntary Purchase Grant Scheme (VPG) was introduced in April 1996. Tenants of Registered Social Landlords (RSLs) (in properties built before 1 April 1997) who do not qualify for the Right to Acquire may be able to buy the home they rent at a discount. It is important to note that the scheme does not apply to all tenants as it is up to the RSL whether it takes part in the scheme and some properties may be excluded.

The applicable discount for Bradford is £9000.

HOMEBUY
The Homebuy scheme was introduced in April 1999 in England and replaced the Tenants Incentive Scheme (TIS) and the Housing Corporation funded Do-It-Yourself-Shared-Ownership Scheme (DIYSO). The Homebuy scheme enables tenants of Registered Social Landlords (RSLs) and local authorities, as well as others in priority need on local authority waiting lists, to purchase a home on the open market with the help of an interest free equity loan from the RSLs equal to 25% of the purchase price, subject to certain limits. The remaining 75% is funded by the applicant through a conventional mortgage and savings. The loan to cover 25% of the purchase price of a home does not involve the purchaser in making monthly payments. It is paid back when the property is sold instead. The amount paid back is 25% of the value of the property at the time it is sold. In view of the fact that house prices tend to be increasing, the amount repayable will generally be greater than the value of the original loan.

CONVENTIONAL SHARED OWNERSHIP
Under this scheme, RSLs build or purchase and renovate existing dwellings for sale to purchasers on shared ownership terms. The purchaser buys a share of a property and pays rent on the remaining share. The amount of equity initially purchased is normally between 25% and 75%. Gradually the shared owner may buy further shares and eventually own their home outright. The scheme is intended to help those in housing need who would otherwise be unable to purchase a property outright. Priority is generally given to existing council and RSL tenants and to those on housing waiting lists.

DO-IT-YOURSELF-SHARED-OWNERSHIP
Do-It-Yourself-Shared-Ownership (DIYSO) is offered by a limited number of local authorities. It is designed to enable people on low incomes to gain access to home ownership. DIYSO is similar to conventional shared ownership except it allows a purchaser to select a property on the open market and then buy it on shared ownership terms, paying rent to an RSL on the share they do not own. Applicants chose a property on the open market. The amount of equity initially purchased is normally between 25% and 75%, with an overall average of 50%. There are price limits set on the value of the property which might be bought under DIYSO. There is no statutory right to DIYSO.
  
Conclusions
Within the agenda of government, low cost home ownership remains a significant component of housing policy and housing provision. The housing market currently is difficult to access for first time buyers due to high house prices. Against this background, low cost home ownership helps to meet housing needs both directly and indirectly, widens choice, promotes mixed and balanced communities, and supports regeneration of blighted estates.

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Manningham Housing Association, a specialist housing association providing accomodation for large families and diverse minority communities in Bradford and Keighley, West Yorkshire, promotes tenant involvement and regeneration of local communities in addition to providing development of new homes and services to meet the housing and support needs for the community.
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