Agenda item

Labab Lubab, Partnership and Strategy Manager, explained that Low Cost Home Ownership was intended for those who were not eligible for Social Housing, but could not afford market prices.

A variety of products were offered to help residents onto the housign ladder, including: Intermediate Rent, which was a lower than market rent and allowed people to save for a deposit on a property; Shared Ownership, where people bought a proportion of a property and then paid rent on the remaining portion, and; Council Shared Equity, when a portion of the property was sold to a resident with the remainder being owned by the council, which did not charge rent on its portion.

There were 9,000 people on the HomeBuy register, of whom approximately 80% were actively looking for Low Cost Home Ownership properties in the borough. The Council had used information from the register to develop affordability bands to ensure that a broad range of households could access properties; the three bands were those households with a gross annual income of up to £29,000, those with incomes up to £43,550, and those with incomes up to £50,550.  Developers were asked to make a third of their Low Cost Home Ownership Properties affordable to people in each of the bands. This meant that Low Cost Home Ownership in Hammersmith and Fulham more affordable than in other areas where Low Cost Home Ownership was provided for households with annual gross incomes of £90,000, which was the limit in the London Plan.

The number of properties available each year varied significantly, depending on the number of larger developments approaching completion. The HomeBuy service controlled the allocation of properties and this allowed the Council to ensure that they were offered to those with the greatest need and to whom the properties were truly affordable. As well as a front desk at 145 King Street, the service held regular engagement events and would be reintroducing an annual open day to publicise schemes and homes available.

Councillor Jones, Cabinet Member for Economic Development and Regeneration, explained that a significant proportion of the properties which would be available over the next few years would be sold at 80% of their value using the Council Shared Equity scheme which had been favoured by the previous administration. He explained that the present administration aimed to provide truly affordable homes and felt that the affordability bands would help to do this; however, the Council would be prioritising the provision of homes at Social Rents as these would help those in the greatest need. He said that there were also real problems with an uncompetitive mortgage market for shared ownership properties which meant that it was often not a good value way of getting onto the housing ladder.

 Councillor Phibbs agreed that providing sufficient affordable housing in London was difficult. He asked whether, when someone bought a share of a property, they paid a proportionate amount of the service charge, or if they paid the full service charge. Labab Lubab explained that service charges, for things like cleaning and gardening etc were paid by the resident of the property. Any major works costs would be split proportionately. Mr Lubab explained that before a resident was allocated a property the HomeBuy service would ensure that they were able to afford all of their housing costs, including service charges. Kath Corbett suggested that if the Council were to try to split the service charge they might encounter legal difficulties. Councillor Phibbs said that he understood that in Wandsworth those living in Shared Ownership properties only paid a proportion of the service charge. Labab Lubab agreed to speak to colleagues in Wandsworth to understand the benefits and operation of the scheme.

Councillor Phibbs noted that there was a sigificant variation in the number of sales each year and noted that a lack of supply was a problem. Labab Lubab explained that sales were dependent on new properties being built as part of development schemes. He said that the council tried to use planning negotiations, and its affordability bands, to ensure that the limited supply was targetted to meet the needs of residents.

Councillor Phibbs asked about the relationship between affordable home owvership and a Council tenant’s Right to Buy their home. Labab Lubab explained that affordable home ownership schemes could be more affordable to residents as they could buy a share of a property whereas, even with the maximum discount applied, most tenants would be unable to buy their council home. Councillor Phibbs asked whether a Right to Buy Part Scheme had been considered. Councillor Homan explained that the Council needed to retain its social housing stock and so had not introduced a right to buy part scheme which offered limited benefits to residents. She said that tenants who wished to buy a property, but could not afford to buy their home, were able to buy a shared ownership property which both allowed them to get on the housing ladder and the council to keep its social housing stock for those in need. Councillor Jones added that for many tenants a part right to buy scheme would not be useful as competitive mortgages were not available, for example, to those living in tower blocks. Councillor Phibbs noted that right to buy receipts were supposed to be used to replace housing or else be given up to the government; he understood that Hammersmith and Fulham had not been sending money back to government and said that houses sold must therefore be being replaced. Councillor Homan said that the receipts were indeed used to replace properties, however, the replacements were often not equivalent to the homes which had been sold. She also said that it could take years for a new property to be ready for occupation, during which time the social housing stock would be reduced.

Councillor Phibbs noted that at the Factory Quarter development tenants had been offered a small share of their homes in return for taking on additional maintenance responsibilities. He asked whether this had been done elsewhere. Labab Lubab agreed to look into the scheme and see if it benefitted residents.

Councillor Phibbs asked whether any further detail on the government’s scheme to allow tenants the right to buy their housing association properties had been made available. Labab Lubab explained that the scheme was being trialled in five pilot areas and that details of the main scheme was expected to be made available in 2018.

Councillor Connell asked whether the London Living Rent scheme would be used in the borough as this was intended to allow residents the opportunity to save and buy thair own home. Labab Lubab explained that the scheme might work for better off residents moving into one or two bed flats but that most residents would face affordability problems with the scheme owing to high rents in the borough.

Councillor Connell asked what was done to ensure that those on the HomeBuy register were still interested on affordable home ownership in the borough. Labab Lubab explained that a new IT system was to be introduced which would make it easier to manage the list and remove those who were inactive. Around 80% of those currently on the register were looking for affordable homes in the borough but an annual refresh of the list would be introduced. The new system would also allow users to change their details more easily.

Councillor Phibbs asked if those expressing an interest in properties knew how likely they were to be allocated a home. Labab Lubab said that the council’s allocation scheme could guide residents, however, as the procedure was based on who expressed an interest an accurate prediction of whether an allocation would be made to a resident could not be given until later in the process. Priority was given in the following order: 1) Armed Services (and Ex Armed Services) personnel living (or previously living as an adult) for twelve consecutive months in the borough 2. Social tenants in either council housing or Private Registered Provider housing. 3. Police officers living or working in the borough 4. Homeless Working Households in Temporary Accommodation 5. Customers with physical disability using a wheelchair 6. Households living for twelve consecutive months in the borough 7. Households working for twelve consecutive months in the borough 8. Households living or working in the borough with an income within the relevant thresholds.

The Chair said that often too short a period of time was given for people to express an interest in a property. Labab Lubab agreed that short periods of time were given for people to express an interest, however, he highlighted that expressing an interest would not commit people to buying a property; no penalties would be applied until after contracts had been exchanged. Councillor Homan suggested that the information sent to residents be passed through the reading group for their comments.

The Chair asked whether the engagement events were good value, noting the number of people attending them. Labab Lubab said that the events were thought to be worthwhile, especially as the cost of the events was only the officer time to attend them as all venues used were free.

The Chair noted that some properties had a very high savings requirement and asked why this was. Labab Lubab said the properties which were being sold would require a high level of savings as the proportion which would need to be bought might be quite large.

Councillor Connell asked what the minimum percentage of a property sold under Council Shared Equity Scheme was. Labab Lubab explained that as little as 16% of properties had been sold, the affordability bands were used to ensure that this scheme was available to residents. An incremental ‘staircasing’ scheme was planned to allow residents to buy more of the property from the Council.