Committee Report: Affordable Housing Allocations Policy
Report to: |
Community Protection Panel Cabinet |
|---|---|
Date: |
13th November 2006 16th November 2006 |
Subject: |
Affordable Housing Allocations Policy |
Report of: |
Director of Community Protection |
Contact officer: |
Steve Sargent – 01942 827702 |
Purpose / summary: |
To seek approval of a new Affordable Housing Allocations Policy for the allocation of affordable housing for sale. |
Alternative options considered and reason for selecting the one recommended: |
To have no policy setting out the criteria on which affordable housing for sale is allocated. This would not support the aims of the Affordable Housing Strategy in meeting housing need or assist the Council in it’s broader aim of creating sustainable communities. |
Recommendation / decision: |
That the new Affordable Housing Allocations Scheme is approved and negotiations with Wigan & Leigh Housing over the role of the Property Shops be authorised. |
Key Decision: |
This report involves a key decision within ground(s) 1. The decision made as a result of this report will be published within 48 hours and cannot be actioned until five working days have elapsed after that (making a total of seven working days after the meeting) i.e. before 28th November 2006 This item is included in the Forward Plan. |
Implications: |
|
Financial: |
Within the financial resources generated by the SPD on Affordable Housing / approved Capital Programme |
Staffing: |
Within existing staffing levels of Community Protection and Wigan and Leigh Housing. Subject to review |
Policy: |
Affordable Housing Strategy Housing Strategy SPD Affordable Housing |
Equal Opportunities - Has a Diversity Impact Assessment been conducted? |
Yes |
Wards affected: |
All |
Special Interest Members – Which have been consulted |
None |
Tracking/Process:
|
Consultation |
Ward Members |
Partners |
|---|---|---|---|
|
Housing Partnership Affordability sub-group |
- |
- |
Panel |
Overview & Scrutiny |
Cabinet |
Council |
Community Protection 13.11.06 |
- |
16.11.06 |
- |
There are no Background Papers to this Report within the meaning of Section 100D of the Local Government Act 1972.
Proper Officer |
B. Saunders |
|---|---|
Date |
2 November 2006 |
Background
Traditionally Wigan Borough has had a sufficient and at times a surplus of affordable housing. However, over the past couple of years there has been increasing concern regarding changes to Wigan’s housing market which have led to a shortage of affordable housing for both rent and sale. This was quantified via an independent Housing Needs Survey in 2005 and in response to this the Council has implemented an Affordable Housing Strategy which included a Supplementary Planning Document on the provision of affordable housing.
The strategy sets the following aim and outcomes;
Strategic Aim: “An affordable home for all within a desirable community”
Outcomes by 2010
- 530 additional affordable units
- Maintain the assessment of being a balanced housing market within the regional housing strategy.
- For the housing price gap between township housing markets not to widen
The strategy aims to meet the target of 530 additional affordable units by a range of means and by developing different types of housing. The Housing Needs Survey highlighted the shortage of affordable homes for sale and, therefore, a target that 50% of the new provision will be available for sale has been set. It also clearly set out that the bulk of the resources for the strategy would arise from the affordable housing planning policy. However, due to the nature of the planning and development process this will only begin to make a significant difference in the medium term. This was anticipated and a series of small initiatives are underway to increase the overall supply of affordable homes in the short term. Progress is illustrated below.
Properties released from Asylum Seekers contract |
+146 |
|---|---|
Bond Scheme |
+42 |
Reduction in voids in Council stock |
+33 |
Other Private Rented initiatives eg Empty Homes Challenge Fund |
+20 |
We have also increased access into Housing Association tenancies for those on the Council’s waiting list by over 100 units through the re negotiation of nomination rights with local providers. Despite this, there has been limited impact on availability as the annual rate of turnover in the main stock has steadily decreased from 3596 (11.8% of the total stock) in 1999/00 to 2058 (7.8%) in 2005/06.
Whilst additional rented properties will be allocated according to existing allocations policies and nomination agreements, a new allocations policy is needed for the additional homes built for sale. This new policy sets out who will be eligible for the properties, how eligibility will be assessed and how the properties will be marketed for sale. The allocations scheme will apply to new build properties, re-sales of affordable housing and affordable housing bought on the open market with a subsidy or equity loan.
As a reminder, the bulk of the affordable housing for sale is likely to be shared equity housing, where a nominee purchases a property at a set discount and takes the equivalent equity stake in the property. They don’t pay rent on the portion they don’t own and on resale this benefit is recycled to the subsequent occupiers.
This report has been developed well in advance of any likely properties so as to ensure systems are in place, to enable discussions to take place with Wigan & Leigh Housing and to enable the policy to be included within the legal agreements with developers (section 106 notices).
Proposals
The proposed allocation scheme is set out as an Appendix to this report. In essence it features eligibility criteria, advice provisions and the allocation procedure. The latter involves a two stage process, starting with initial registration and then the actual allocation of the dwellings.
Advice and Information
It is the preferred option that initial advice and information on the range of affordable housing for sale and the application process will be made available through the Property Shops.
The purchase of a property is a long term commitment and we need to ensure that all applicants receive the correct advice in order to make an informed choice as to whether home ownership is the right option for them. It will be a condition of the scheme that applicants receive independent financial advice to establish that
- They are in a financial position to obtain a mortgage
- That they need assistance to buy
- That they are given advice on the range of mortgage products available
- That they understand the financial commitment required in terms of repayments, insurance, fees etc
The details of how the financial assessment work will be undertaken, including the possible role of Property Shop staff, independent financial advisers or other advice agencies has yet to be established.
Eligibility Criteria
In order to be eligible to register on the scheme and subsequently buy one of the affordable properties the following criteria must be met.
- Financial Criteria – Qualifying persons must be otherwise unable to buy a suitable home outright but be able to afford the discounted/ equity share value of the property. A full financial assessment will be undertaken to establish this.
- Qualifying Circumstances – Qualifying persons must live, work or have a long standing family connection to the borough.
- Occupancy Criteria – Qualifying persons must intend to use the affordable home as their only or principal home.
- Joint Applicants – All joint applicants will be expected to become joint owners and the financial means of all applicants will be assessed.
- Additional Priority – In order to ensure that affordable home ownership is available to those in greatest need, certain properties will be reserved for priority cases. Allocations to these cases will also assist the Council’s broader aims of promoting sustainable communities and making best use of the available affordable housing stock.
Application and Assessment Process
Applications are likely to be made via the Property Shops. Once registered, it is the applicant’s responsibility to select a suitable property. All available properties will be advertised at the Property Shops and other locations, such as our webpage. As the homes are for sale and we aim to promote choice, applicants will not be matched to properties and they may express an interest in any type of home, subject to availability and eligibility.
When an applicant has reserved a property a full assessment of their application will be made. This is due to the fact that their current financial circumstances will need to be assessed against the value of the property they have selected.
Obligations of Occupiers
In order to protect the affordable housing scheme for the future and to prevent abuse by residents it is intended that restrictions will be registered as a charge against the property.
Once resident, restrictions will be placed on occupiers of the affordable housing with regard to
- Occupation as only or principal home ie. not to sublet the affordable housing unit
- Re-mortgaging of the affordable housing unit
- Securing additional borrowing against the affordable housing unit
- Carrying out substantial alterations or improvements to the affordable housing unit
- Purchasing additional equity/ buying out of the affordable housing scheme
- Selling the affordable housing unit
The full Affordable Housing Allocations Scheme is attached to this report.
Conclusions
This report outlines the provisions of the new Affordable Housing Allocations Policy. The policy aims to offer choice to applicants, whilst responding to housing needs and it intends to ensure that home ownership is manageable for occupiers. We will continue negotiations with Wigan and Leigh Housing Property Shops to develop the operational details of the scheme. Provisions are in place to monitor and review the impact of the policy. It will need to be updated to reflect the local housing market and to respond to changes in national policy and guidance. It is intended that further reports will be brought back periodically as need arises.
It is recommended that the new policy is approved for adoption and that negotiations with Wigan & Leigh Housing over the role of the property shops be authorised.
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