Aspects of shared homeownership

Transcription

1 Aspects of shared homeownership Presentation for the Shared Equity Homeownership Working Group s Benefits of shared homeownership seminar, Parramatta, 18 July 2016 Craig Johnston

2 Shared-equity approaches (Pinnegar and others 2009) 2

3 Definitions Shared equity the 2 parties own a share of the property s value Shared-equity loan Party 1 takes out a mortgage on a proportion of the dwelling, Party 2 on the balance Shared homeownership tenants in common Party 1 might pay rent on proportion they don t own Party 2 has a stronger interest in property partic. at sale 3

4 Examples in Australia Equity loans targeted to public-housing tenants SA: EquityStart loan QLD: Pathways Shared Equity loan, State housing loan TAS: HomeShare WA: GoodStart Home Loan scheme ACT: Shared Equity scheme Equity loans targeted to lower-moderate income SA, WA, NT Shared homeownership WA: Shared Home Ownership scheme 4

5 Shared Equity scheme ACT Homebuyer partners with Housing ACT PH tenants existing dwelling 70% minimum loan from IMB Housing ACT max 30% share; to be bought out within 15 years Homeowner pays for outgoings; does not pay rent on Housing ACT s share 77 since May 2010 (10 paid out) 5

6 Shared Home Ownership WA Homebuyer partners with Housing Authority HA properties (does not equate to public housing ) procurement of properties at scale (1,005) and discount ; linked to a sales program SharedStart homeloan from KeyStart Home Loans The loan can be fixed or flexible If fixed, homeowner buys 70% which they may sell back to HA; may never own 100% (HA has max 30% share: retains permanently) If flexible, homeowner required to buy HA share and repay KeyStart loan over 30 years Fixed or flexible refers to nature of HA s equity share, not interest rate Homeowner pays for outgoings (normal dwelling costs ); does not pay rent or interest on HA s share 913 since

7 WA and ACT Commonalities Government-managed Existing PH tenants (but WA also other low-middle income) DOH properties Govt-specified lender HA share max 30% Homeowner pays for outgoings Homeowner does not pay rent on HA share Differences WA linked to new build and to sales WA has option for not buying out HA s share 7

8 Benefits Households Government Construction industry M Thomson & others, A new approach to delivering shared equity opportunities in Western Australia: a case study evaluation, AHURI & PwC,

9 Benefits of the concept for a consumer Tangible Fiscal (cp. Emilio Ferrer) Intangible Ontological security 9

10 Ontological security 'Saunders (1984, 1990) argued that one of the key advantages of home ownership over other tenures was its ability to provide ontological security which he defined as: Where people feel in control of the environment, free from surveillance, free to be themselves and at ease, in the deepest psychological sense, in a world that might at times be experienced as threatening and uncontrollable (Saunders 1990: 361). (Hulse & Saugeres 2008) 10

11 Ontological security (again) Home is an encompassing category that links together a material environment, in this case the physical structure of a house, with a deeply emotional set of meanings to do with permanence and continuity. (Dupuis and Thorns 1998) 11

12 Consumer aspirations most participants were looking for a stepping stone that helped them realise the dream, rather than a variant thereof. Many participants picked up on the dangers of their incomes not rising as fast as house prices, creating a situation where the proportion of asset accruing was growing, but in absolute terms, stretching even further away from the level of equity required to transition to full ownership. (Pinnegar and others 2009) 12

13 Not a pathway to full ownership (necessarily) Typical starting investment 40% share in England and Scotland; only half move to full ownership permanent hybrid tenure (JRF 2008) 13

14 Economic and social benefits Good quality housing Affordable mortgage payments comparable to private rents Security of tenure Financial security, including a financial investment for the future Pride in owning a home Improved social status and self-esteem (AHURI 2013) 14

15 Maximizing consumer benefits Affordability outcome Affordability calculator Fair trade for consumer Rights and responsibilities: Transparent and appropriate co-owner agreement Security and other benefits from homeownership Independent legal and financial advice (Social) mission-based landlord 15

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