Posts with tag: right-to-buy scheme

Housing Associations Should Understand Changes

Published On: June 8, 2015 at 12:51 pm

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As the new Government looks set to make changes to the property industry, housing associations should be aware and understand all of the policies and regulations.

The sector will be keen to influence the Right to Buy plan, which will see housing association tenants given the opportunity to buy their homes. This policy may even be campaigned against.

Association board members or senior executives should be aware of the potential impacts on business. Ask yourself how many tenants will use the discounts? What will the cost of replacing the homes be? What effect will it have on funds? How will it influence your future investments?

Housing Associations Should Understand Changes

Housing Associations Should Understand Changes

Alongside Right to Buy is the welfare reform set to cause problems for many on benefits. It is believed that £12 billion will be cut and the cap will be reduced from £26,000 per year to £23,000. Automatic housing benefit entitlement for 18-21-year-olds will also be removed. This will dramatically affect tenancy support and income.

Regions

A Devolution Bill will aim to create a northern powerhouse, giving more power to big cities. London already has a separate investment identity and could seek more power.

For associations with strong connections to local authority partners, this regional revival could be beneficial. But for associations working in the Midlands, especially rural parts, being overlooked is likely, as politicians focus on the North and South.

In Scotland, Wales and Ireland, further devolved powers will affect associations who work across borders.

Right to Build and the new starter homes scheme aim to provide an extra 200,000 homes at a discount of 20% to first time buyers under 40. This will reduce affordable homes schemes that are offered through the planning system.

For those dependent on section 106 planning agreements, new approaches will be needed for delivering affordable housing.

Funding

Funding new developments is also an area that needs consideration, as the cut to public sector resources will not return to previous levels of public subsidy. Associations should prepare for a lack of Government grants.

Associations must also ask who they can home. Will properties only be given to those who can afford them without huge amounts of benefits? Immigration is also an area of concern.

Housing associations now have the task of answering these questions and understanding the changes that will inevitably affect their practice.

Ex-council properties proving lucrative

Published On: May 26, 2015 at 3:13 pm

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The extension of the right-to-buy scheme to housing association properties has led to a number of ex-council flats in London being refurbished and sold on for a tidy rent.

Agents in the swanky borough of Mayfair in the West End of the capital note that they have seen a rising number of former council properties appearing on the luxury letting market.

Rents

Letting agent E J Harris believes that a one-bedroom ex-council property in the area could command a rent of between £350-400 per week, equivalent to £19,200 per year. Furthermore, the same agent believes that a two-bedroom flat could fetch up to £600 per week.

Peter Wetherell, chief executive of his own letting agency, Wetherhell, stated that he had assessed a council apartment for £800,000, where a flat in the building commands a weekly rent of £550.

Commenting on the area, Mr Wetherell said that, ‘when it comes to Mayfair and the wider West End I don’t think there is any stigma with ex-council homes. Mayfair is always a good address of whether it’s a private sector, ex-council or shared ownership property, it’s a place people aspire to live in and are proud to say is their home.’[1]

Wetherell feels that, ‘in a short time we will see the emergence of the multimillion pound ex-council property which shows the extraordinary rise in capital values across Mayfair and the West End currently and over the last 20 years.’[1]

Ex-council properties proving lucrative

Ex-council properties proving lucrative

Generous sizes

Managing director of E J Harris, Elizabeth Harris, believes that former local authority flats in the capital are, ‘nearly always large,’ with, ‘generous room sizes and in superb addresses.’ Harris feels that this makes them a, ‘gold mine for anyone purchasing them, refurbishing them and then using them for rental income.’[1]

Becky Fatemi, managing director of Rokstone, said that she has ex-council properties in areas such as Marylebone and Notting Hill in her portfolio. She suggests that these properties tend to be listed around 20-25% less than the price of private built homes.

‘There are particular ex-council buildings which are seen as iconic and are popular with tenants and purchasers and these include the Luxborough Tower in Marylebone, the Trellick Tower in North Kensington and the Brunswick Centre in Bloomsbury,’ she stated.[1]

[1] http://www.theguardian.com/money/2015/may/26/ex-council-homes-london-gold-mine-landlords