Extra help proposed to get on the housing ladder

Published: Thursday 21st June 18

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 a 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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Recent comments

Have there been any updates on this since the meeting on 2nd July. I would love to have more information on this.
Jonathan

13 July 2018

Either the article is wrong, or the scheme is utterly meaningless. The article says it's for "families on average or below average incomes". Let's do the maths. According to the ONS, median household income was £27k in 2017. That would give a mortgage of £108k at 4x income. Add the maximum loan of £75k, gives you £183,000. Where in Wandsworth can you buy a flat for that? Our Conservative council have no connection to reality. Why don't they enforce "affordable housing" (1 bedroom flats at £450k...) in the new developments rather than let the developers get away with reducing their responsibility to practically nothing?
Peter Hawkins

22 June 2018

Will the council check to ensure that people don't use the loan to buy somewhere which they then rent out at high rental, thus ensuring that the people who really need housing still can't afford to buy anywhere. The WBC scheme some years ago was severely abused by people who claimed to live in Wandsworth to get a discount but, in reality, lived elsewhere and profiteered from the WBC scheme. Is this another way that the unscrupulous can make money from our Council Tax?
Jane

22 June 2018