Shared ownership a tenure in its own right?

Transcription

1 Presentation July 2015 Shared ownership a tenure in its own right? Catherine Hand, Trowers & Hamlins LLP

2 But first a bit on RTB and housing associations You can t sue Parliament! and they can legislate to make owners sell CPO, leasehold enfranchisement Human Rights Act angle deprivation of property without compensation Refunding discounts will that happen? It does with right to acquire by statute but the money is in the DPF not free to spend What about existing rights/obligations/restrictions on land? Up to purchaser whether to accept title or not.

3 But first a bit on RTB and housing associations (2) Where are the lenders in all this? charges automatically released under PRTB reasonably relaxed so far not a disaster scenario possible issues for an RP right on security will they be able to put money in a charged account? experience of PRTB and with LSVTs Impact on business plans Exemptions sheltered housing? Current RTB exemption not absolute, supported housing? Rural housing?

4 Shared ownership and the RTB Right to a S/O lease has been suggested as an alternative to RTB no traction as yet Used to exist statutory right for Council tenants who wanted to buy and couldn t afford it Suggestions from HA S/O leaseholders that new RTB unfair to them they get no discount Many S/O leases are technically assured tenancies assumption they will be excluded from HA RTB

5 Shared ownership Stepping stone to home ownership or a tenure in its own right Not well understood by public or purchasers solicitors Ownership not shared leaseholder has 100% of property, all the liabilities and a % of the equity To be a real tenure needs to be tradeable as a shared ownership lease

6 Who is it for? Lower limits on incomes has the sector got it right? comparison with private renting and amount people spend on housing Availability of deposits low income, large deposit should that be ok? Charitable status the elephant in the room is S/O especially high value S/O - really charitable

7 Mortgageability Vital and not just with the one lender whose been involved Usual clauses ability to staircase to 100% and sell back to back If real market in shared ownership lender would not need to do this RPs more proactive in keeping an eye on arrears, keeping a list of possible buyers, more control over allocations Ability of RPs to encourage lenders into market Affinity Sutton deal with Santander

8 To staircase or not to staircase Where grant funded by HCA (and before them the Housing Corporation) have had to allow staircasing to 100% unless rural Non staircaseable S/O leases possible but really complex issues around enfranchisement/lease extensions preserved affordability difficult to achieve Lenders may require it anyway Staircasing down been done. Should more HAs offer it?

9 Does it have to be new build? Who remembers DIYSO? Southern Housing Group second steps initiative What about S/O with very small shares? Easy access to home ownership Fair to have 100% of liabilities? Repairs? Service charges? Admin costs need very simple mechanisms to change shares

10 Contact Name JobTitle Catherine Hand Partner d +44(0) e chand@trowers.com Trowers & Hamlins LLP 2015 Trowers & Hamlins LLP is a limited liability partnership registered in England and Wales with registered number OC whose registered office is at 3 Bunhill Row, London EC1Y 8YZ. Trowers & Hamlins LLP is authorised and regulated by the Solicitors Regulation Authority. The word partner is used to refer to a member of Trowers & Hamlins LLP or an employee or consultant with equivalent standing and qualifications or an individual with equivalent status in one of Trowers & Hamlins LLP s affiliated undertakings. A list of the members of Trowers & Hamlins LLP together with those non-members who are designated as partners is open to inspection at the registered office. Trowers & Hamlins LLP has taken all reasonable precautions to ensure that information contained in this document is accurate, but stresses that the content is not intended to be legally comprehensive. Trowers & Hamlins LLP recommends that no action be taken on matters covered in this document without taking full legal advice. (c) Copyright Trowers & Hamlins July 2015 All Rights Reserved. This document remains the property of Trowers & Hamlins LLP. No part of this document may be reproduced in any format without the express written consent of Trowers & Hamlins LLP.