1. Alternative Housing Provision Housing Directors' Meeting 21 October 2015 Richard McQuillan Head of Housing Services Hafod Housing Association

2. Background  Hafod Housing Association provides & manages a range of housing models outside the standard SHG model:  Low Cost Home Ownership  Shared Ownership  Flexi Tenure (for the elderly)  Rent First – Buy Later  Intermediate Rent  Homeless leasing (Not covering)  Social lettings (Not covering)

4. Low Cost Home Ownership (LCHO) Traditional approach 70/30 ownership Sell property for 70% of the market value Association retain 30% equity in the property No charges related to 30% equity No time limit on redeeming 30% equity

5. LCHO Challenges Local Authority Partnerships –Identifying potential buyers –Local connection criteria –Affordability Market Vs Sector Approach –Marketing via a waiting list Securing a Mortgage –Savings –Other costs Market Prices in some areas pushing up LCHO prices

6. LCHO Challenges Cont. Developers attitudes towards Section 106: –Not sure of standard of property handed over –Advance marketing can be difficult –Additional costs for turf, carpeting, white goods, door numbers! Managing Service Expectations: –Out of hours viewings –Weekend open days –Quick response to defects etc.

8. Shared Ownership Part Owned / Part Rented Percentage of ownership can vary Owner can staircase up to full ownership Not seen as a great deal for buyers Full repairs responsibilities with the owner No longer pursuing this model

9. Shared Ownership Challenges Some tenants struggling to pay rents & mortgages Historic issues of tenants not understanding financial implications investing in a property Monitoring condition of the property –Some tenants not investing in their home Increased house prices & economic climate –Lower rate of tenants staircasing to 100% ownership

11. Flexi-Tenure One scheme in a Cardiff (Sheltered Scheme for the Elderly) Part Owned / Part Rented Owners can reduce equity in the property as well as increase their equity stake. Owners can purchase up to 95% of the property.

12. Flexi-Tenure Observations Combined Rents & Service Charges can by high even at 95% ownership: –Low rental element –Service charges for Sheltered Scheme not cheap Popular scheme: –Desirable location - Near Roath Park Lake Cardiff –No difficulties for tenants to sell

14. Rent First – Buy Later Only managing two schemes Intermediate (LHA) rents set to allow for the saving towards a mortgage Valuation taken at the start of the tenancy Valuation taken when tenant choose to buy The difference in valuation is shared between the Association and the tenant Can’t sell below purchase & works / acquisition costs

15. Rent First – Buy Later Challenges Confusing for tenants - No guarantees of ‘discount’ offered Purchase & works costs can exceed local house prices (low value areas) Difficulty saving for mortgages: –Other financial priorities –Tenants often ‘dip’ into savings –Change of economic / personal circumstances

17. Intermediate Rent Welsh Housing Partnership (WHP) Funded through Association Reserves, Loans & Grant Increase supply of affordable homes Rent level set at Local Housing Allowance (LHA) rate Help those: –Unable to buy –Struggling to pay market rents in the private sector –Not able to access social housing Over 260 units

18. WHP Challenges Increasing house prices create challenges to procuring properties at the right price Keeping improvement costs to budget – unexpected works Ensuring the model financially stacks up – easier in higher LHA level areas Trying to please all our local authority partners Local authority partners having own agendas

19. Welsh Housing Partnership Scattered units or new development Popular with tenants: –Cheaper than market rents in PRS –Good quality accommodation –No stigma of ‘social rented’ housing Association benefits –Low turnover –Low rent arrears –Low repair costs

21. Any Questions?