Social Homebuy

Social Homebuy is a low cost home ownership scheme designed for social housing tenants who want an equity stake in their home, or the opportunity to purchase their existing home outright. Through this new scheme, the government wants to give existing tenants the opportunity to get onto the housing ladder by acquiring a shared ownership interest in their property.

How the scheme works:

• Council Tenants can purchase a minimum initial share of 25% of their home and buy further shares in the future, if their circumstances change.
• They can then buy as low as an extra 10% share and eventually this will rise to a maximum 100% share of their home, at which point, they would acquire freehold or leasehold interest in the property.
• From the moment the tenants buy their first share they are responsible for all of the repairs and maintenance of the property and, if they live in a flat, for the full cost of any service charges.
• There would continue to be exclusions to the scheme on the same basis as the current Right to Buy restrictions. Therefore all of the Council's sheltered housing stock would be excluded from the scheme

Who will be administering the scheme?

• Discussions have taken place with Swaythling Housing Society which already provides a similar scheme for its tenants. Swaythling has also been appointed by the Housing Corporation for all shared ownership properties in the county, and as a result, has existing computer systems and literature which can easily be adapted to cater for any enquiries from Fareham's tenants.
• The Council has agreed with Swaythling to administer the scheme, although the Council's estates and legal sections would continue to provide valuation and legal advice in the same way as is the case for Right to Buy applications.

Discount

• Social housing tenants taking part in Social Homebuy are entitled to a discount on the initial share of their purchase. This discount is significantly less than the equivalent available under Right to Buy (currently £38,000) and is set at £11,000 for Fareham, which is the maximum discount on the purchase of a 100% share.
• Under Social Homebuy, if a tenant buys a 25% share then the discount will be based on a pro-rata of the maximum discount, i.e. a 25% share would equate to a discount of £2,750 (£11,000 x 25%). The rent is calculated at 2.75% of the unsold equity of the property and not on the current rent of that property.
• The property is sold as a percentage of the full market value. The Department for Communities and Local Government (CLG) has confirmed that, from April 2008, the discount will also apply to the purchase of further shares.
• The Council would continue to own 75% of the property and would get a rental income.

It is hoped that the scheme will be launched soon. Publicity material in the form of a leaflet is available on request. In the meanwhile should you have any queries regarding the scheme please contact Fareham Borough Council or visit www.homesinhants.co.uk/about_socialhomebuy.asp (this is an external hyperlink) provided by Swaythling Housing Society.