Bristol association has spent only £345,000 of £975,000 starter homes initiative fund
A bristol housing provider may be forced to hand back more than £600,000 of grant aimed at helping key workers onto the housing ladder, despite increasing the size of loans.

In yet another blow for the government's beleaguered starter homes initiative, Knightstone Housing Association's key-worker scheme has suffered from low take-up and the organisation could forfeit the cash next March.

Last month, the government upped the loan limit on the SHI from £10,000 to £20,000 after critics said the low cap was to blame for poor take-up. However, this has had a limited impact on Knightstone.

The association has managed to hand out only £345,000 of the £975,000 Housing Corporation grant allocated to the scheme through the SHI.

Knightstone has spent almost £10,000 advertising the scheme on the radio, buses and even in hospitals, but take-up of is still low.

The corporation also widened the pool of people who could qualify for Knightstone's scheme, from nurses on lower pay grades and newly qualified teachers to anyone on a full-time NHS contract, occupational therapists and social workers.

A spokesman for the association said: "We sent out 420 application forms but only a handful returned and we had 18 people successfully apply, so we spent just over one-third of the money we have available."

The scheme was limited to homes up to £77,000 but now there is no upper limit on prices. However, Knightstone uses its Homebuy limits of £129,600 for a two-bedroom house or £161,200 for a three-bedroom home as a yardstick and allows people to buy more expensive properties if they can justify it.

The loan covers one-sixth of the cost of a house, up to £20,000. No interest is paid on the loan but a percentage of the sale price would be repaid on sale of the house.

The Knightstone spokesman thought confusion over definitions of who was a key worker, lack of national publicity and stigma attached to social housing could be reasons for the poor take-up.

He said: "Key-worker definitions are confusing. In some areas they include police and firemen; in others they don't. It's not so much about changing the qualification criteria as using the collective might of the corporation to publicise the scheme."

Source

Housing Today