Housing scheme under pressure

Landlords in the guise of Housing associations are finding great difficulty in kick-starting a government initiative programme to create home-owners.

Housing associations are finding homes built for the “try before you buy” shared ownership scheme are not attracting tenants who rent the properties to go on and buy them. The scheme, started in 2008 and funded to the tune of almost £300 million by the government, was designed to allow prospective buyers of difficult to sell houses, the chance of occupying the properties on a subsidised rent for up to 5 years in the hope that they would eventually buy the home.

An unofficial survey by the Homes and Community Agency (HCA)  shows that at the moment only 2% of the properties built have gone on to be bought by the sitting tenants. Although only 2600 of the proposed 7000 have been marketed so far, the HCA’s report covering 1884 of those properties reveals only 36 have been sold.

Spokespeople for the Housing Associations involved with the scheme, say they are trying various incentives to promote the scheme, but apparently with little success.

Debbie Small, a director of Inplace, the home-ownership section of the Hyde Group, was typical of others in the sector when saying the company was looking at “a whole host of incentives” to encourage RtH tenants to buy their homes. “We are looking at trying to convert 50 through targeted campaigns in areas where we think that demand is highest.” She added Inplace had sold just 3 of their allocated 300.

It seems there is much to do to improve the success rate of a scheme started up to soften the blows of the credit crunch, and now running full tilt into a period of severe austerity. Landlords are well advised, whatever their financial circumstances, to ensure they have landlord insurance.