MAKING HOME OWNERSHIP AFFORDABLE Phil Moore Neighbourhoods Regeneration Manager

WHY TENURE DIVERSIFICATION? Creating mixed, attractive sustainable areas Applies to existing as well as new neighbourhoods New neighbourhoods over 50% ownership Current estates typically 2% to 25% So a programme to sell existing customers their homes

DEVELOPING NEW APPROACHES: FIRSTLY, SOCIAL HOMEBUY Early pilot from customers in 14 areas Discount of £9k to £16k 32 sales Verdict – small scale, not very affordable. Niche product Conclusion - new product needed

RENTING TO OWNING PfP own product Voluntary Sales scheme Based on equity loan For good/long standing customers of 5 years plus Buy at 60% or 70% market value - £100k house for £60k mortgage No payment on the equity loan part Full ownership Only condition – repay same % on first sale. BUT – market collapse !

KEY DRIVERS Primarily to fulfil home ownership and financial aspirations of customers – asset building More sustainable communities-keeping residents with jobs Financial model that is neutral between selling and renting, acceptable to RSL

RtO LAUNCH AND RESULTS SO FAR Phase launch to 25 areas, 8500 customers 9 sales so far Phase 2 just launched – 6800 customers including 3 large areas

WHAT DO WE THINK OF IT SO FAR? Slow burner – changing neighbourhoods is a long process Still market testing through variety in the pilots Current market is very low – preparing for the future Equity loan not easy to market An attempt to cut through the first time buyer barriers – high deposits Still a niche product

THE BENEFITS To the residents Making home ownership affordable on an income of £20k+ Building a long term asset Fulfilling aspirations Financial inclusion To the organisation More balanced neighbourhoods Keeping residents with jobs Financial – capital receipt equals rental stream Financial – recycled capital grant Financial – equity as an asset

NEXT STEPS Evaluate Widen the scope – all PfP customers? New products to achieve higher ownership rates – eg sale of vacants pilot using the same equity loan model Keep going – meeting customers aspirations