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Joint help for Local Authorities boosts affordable home ownership

The note, entitled “promoting mortgage access for affordable housing”, outlines a range of legal and planning steps that could be implemented by local authorities to increase the attraction of schemes to mortgage lenders, boosting home ownership and improving social mobility.

Jamie Ratcliff, head of intermediate markets at the HCA says: ”Lenders are reluctant to mortgage some low cost homes subject to certain legal and planning conditions put in place to help create and maintain mixed communities. These conditions can often make properties more difficult to buy and sell, but, as our note details, many of these barriers can be overcome, without impacting on the social mix of neighbourhoods.”

Abigail Davies, head of policy at the Chartered Institute of Housing, added: “This is an important issue for housing and planning professionals involved in the delivery of affordable housing. Our note is intended to raise awareness of these issues and provides the tools for local authorities to successfully overcome them.”

Already the HCA has been invited to work with Cornwall Council to enable it to deliver its ambitions for increasing affordable home ownership across the county in a pilot partnership focusing on mortgage availability. This work will include the exploration of alternative ways to deliver mortgage products, across the county.

Councillor Mark Kaczmarek, cabinet member for housing and planning says:  “From a Cornish perspective we strongly welcome this good practice note which will enable us to deliver more homes that are attractive to lenders, providing greater opportunities for local people to get a foot on the property ladder. This is the first pilot in the country and one which I hope will lay the foundations to improve mortgage availability across Cornwall.”

The good practice note aims to offer advice to make homes more attractive to lenders, but at the same time allow authorities to retain control over the affordable housing offer being made to local people. Problems experienced by lenders in relation to certain restrictions which limit the occupancy of homes; using valuation methods other than market value and complex legal clauses are highlighted for the benefit of  local authorities, developers, lenders and providers of affordable housing. Awareness of these issues should help increase the attraction of affordable home ownership to both lenders and future buyers.

With mortgage lenders continuing to take a cautious approach, the HCA and CIH believe that adopting standard legal clauses, linking property values to market rates and putting a time limit on occupancy restrictions are just some of the ‘quick win’ ways that home ownership can be made simpler and levels boosted.

Details of the barriers and steps that can be adopted to increase access to mortgages for affordable home ownership can be found at www.homesandcommunities.co.uk/public/documents/mortgage-access-for-affordable-housing.pdf on the HCA website or at www.cih.org/policy/mortagesforaffordablehousing.pdf  on the CIH website.

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