Westbury Housing Investments
Affordable homes for local communities
A ‘first of its kind’ shared equity scheme with a range of tangible, wide-reaching benefits has been launched.The ‘Westbury Housing Investments’ initiative is aimed at ensuring a supply of affordable homes to meet the commercial challenges of today’s housing sector.
Background - The majority of affordable social housing is now provided to Registered Social Landlords by housebuilders through Section 106 planning agreements which typically have called for 80% of these homes to be rented, 20% shared ownership.The declining property market has meant that the lower values of these rented and shared ownership homes has put these sites in jeopardy due to commercial unviability. This has led to developments either being halted or in some cases not even started.
How does this scheme solve the problem? If the tenure mix of Section 106 sites is changed by introducing shared equity homes in place of rented and shared ownership (typically to 50% rent, 50% shared equity whilst maintaining the total number of homes built), the site can become viable. In addition, aspiring home owners using shared equity as opposed to shared ownership do not need to find such a large initial deposit.
Westbury Housing Investments will also recycle any surpluses arising from ultimate shared equity sales back into the local area to produce more affordable homes. This ring fencing of the surpluses will meet the ‘perpetuity’ requirement of many adopted affordable housing policies and does not differ from the situation in conventional RSL shared ownership schemes and the use of staircasing receipts as recycled capital grant funding.
How does it work? Purchasers take out a mortgage for 75% of the property’s selling price and are then given a loan from Westbury Housing Investments for the remaining 25% of the equity which is interest-free for five years. In the sixth year the interest is fixed at 1.75% and then increases at a rate of RPI+1% annually for the life of scheme, which is 15 years in total. Residents have the option to staircase their shares up to 100% ownership at anytime over the 15 year duration.
As with conventional Section 106 affordable housing, the shared equity homes will go to appropriate people nominated from the waiting lists of local authorities or their designated agent. This ensures that priority is given to people in housing need and on the waiting list for affordable housing. The specification and quality of homes being developed under this initiative will be as high as those in the private sector.
Putting it into practice - the first Westbury Housing Investments scheme is now underway in Braintree, Essex. Download the case study for more details on how it has revived a site which had laid dormant for several years.
For further information please contact: Dr Ashley Lane Group Partnerships Director, Persimmon Homes Group.
Tel: 07957 815275