Households At Risk Of Repossession Could Be Saved With New Rescue Service |
|
People facing having their homes repossessed in the Thames Valley region could be protected by a new mortgage rescue scheme run by housing associations, under plans being considered by ministers. Under the action plan, drawn up by the National Housing Federation, housing associations would also buy up thousands of unsold privately built homes, before offering them for sale or rent at affordable rates. The downturn in the housing market has seen a number of unregulated firms offering to buy properties from people struggling to pay their mortgages, but usually for prices well below the market value. They then rent back these homes to the sellers on a short hold tenancy, while they wait for the market to pick up - offering their tenants little long-term security. But the Federation now wants housing associations to increasingly step in and offer to buy homes at risk of repossession at a fair price, as part of a new nationwide mortgage rescue service. The associations would then offer the seller the chance to buy it back under a low cost ownership arrangement when their financial situation improved, or to remain permanently in their homes as rent-paying tenants. Such schemes are already being run by a number of housing associations across the country. The paper, Protecting Households, Delivering Homes, argues government cash already committed to building new social homes over the next three years should now be used to help run fair mortgage rescue schemes. The proposals come at a time when Housing Minister Caroline Flint has publicly asked stakeholders to propose measures to deal with the current housing market problems that are 'responsive, flexible and pro-active'. The Federation, which represents 300 housing associations in the South East, has also called on the government to help associations buy unused or partially used land from private developers for building new homes on. Under regional planning targets, tens of thousands of new properties are due to be built over the next 20 years to help tackle the chronic shortage of homes in the region. However, many experts now believe the target - which is part of the government's overall plan to build 3m homes by 2020 - cannot now be achieved in the way previously envisaged because of the market downturn. But the Federation believes thousands of social homes could still be supplied through a reconfigured approach. Federation chief executive David Orr said: "A weakening housing market will increase the number of unsold or difficult to sell properties - and sites available for purchase at prices lower than in recent years. "This will create opportunities for housing associations and the affordable housing programme to continue to provide and, possibly, increase the supply of affordable homes. But only if the situation is managed effectively." He warns that as housing association homes are built to higher environmental and structural standards than privately built homes, associations should be able to buy empty private sector homes at reduced rates so that they can afford to upgrade them. He says: "There is substantial difference in the construction and environmental standards between the new homes housing associations would develop and those normally offered on the open market by developers. "Most homes built by private developers are 40 per cent less energy efficient than homes being built by housing associations and do not meet the strict building quality indicators of social housing. "To take account of this, we suggest associations should negotiate purchase prices which recognise the falling market and the additional costs they will have to bear in bringing properties up to standard." |