Up to £1.5 million to be invested to support scheme to help local residents and workers
If you are struggling to raise a deposit to purchase a home, extra support may be on its way.
Wandsworth Council is set to invest up to £1.5 million to support a home loan scheme that will help local residents and workers realise their home owning dream.
If the proposal is approved the funding will be targeted first at assisting council and housing association tenants to purchase with the added benefit that a social rent home would then be made available for re-letting.
The money will be made available to people interest free and repaid either when the home is sold or at another time of the purchaser’s choosing. Under the scheme, which is intended to help families on average or below average incomes, up to £75,000 would be made available towards the cost of a purchase in an interest-free loan, which will be administered by a housing association with the capacity to manage a scheme and provide financial advice.
“This scheme is intended to put the dream of home ownership into the grasp of many more people and is a new addition to a number of successful homeownership schemes that the council has supported,” said Cllr Kim Caddy, Cabinet Member for Housing. “Wandsworth has always been a pioneer when it comes to helping people onto the housing ladder,” she added. “This is a modern solution that deals with a very modern problem when it comes to lack of affordability.”
Unlike Shared Ownership, where portion of the property is purchased with rent paid on the remainder, people using the scheme would own 100 per cent of the property and will not have to pay either rent or interest on the loan. Meaning that the offer is simple to understand and that the purchaser owns the property outright.
For people purchasing a one- bedroom property worth £354,000, a deposit of £35,400 would normally be needed. Under this scheme, the council would loan up to £75,000 interest free, potentially bringing the cost of the property down to £279,200, reducing the deposit to £27,920.
It is likely that the loan will be repaid when the house is sold, with the council taking a proportion of the uplift in value. Therefore, if a loan is worth 20 per cent of the property’s value at the outset, the council would secure back 20 per cent plus any uplift in value. Money that is repaid will be recycled to support the council’s house building and house purchase offers.
The proposal was discussed at Housing and Regeneration Scrutiny Committee last night (June 20th), and, if agreed by the Executive on July 2, will be implemented from the autumn of this year.
It is the latest in a set of proposals from the council to help people who live or work in the borough find a home that is right for them. The council has already committed to spend up to £150 million on building 1,000 new homes to rent or buy with a current forecast that up to 60 per cent of homes build will be primarily for local people on average or below average incomes.
Wandsworth commitment to providing innovative solutions on affordable housing is reflected in the fact that Cllr Ravi Govindia CBE, the Leader of the Council, has been shortlisted for ‘Inspirational Leader of the Year’ in the Housing Heroes Awards. Jointly organised by the Chartered Institute of Housing and Inside Housing magazine, the award ceremony takes place in Manchester next Tuesday evening.
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June 22, 2018