ODPM hammers out Social Homebuy details

The government is today set to unveil its plans to overhaul the various homeownership products on offer to key workers and tenants of social housing.

At a launch in London later today – set to be attended by deputy prime minister John Prescott and chancellor Gordon Brown – the ODPM will also reveal details of the long-awaited consultation paper on proposals to allow tenants of social housing to buy a share in their home.

The same launch will also be used by Prescott to announce further details of the £400m deal struck a year ago with health service landowner NHS Estates to transfer enough land to build 15,000 homes to regeneration quango English Partnerships.

And the competition to build a £60,000 house will also be formally initiated – more than 200 firms have already expressed an interest in joining.

It is understood that ODPM officials have been working around the clock to pull the various announcements together in order to beat the expected announcement of a general election by Tony Blair on Monday or Tuesday next week. Once this has happened, the publication of consultation documents is prohibited by parliamentary rules (HT 24 March, page 9).

Sources have indicated the key concern of ministers ahead of the election is to be able to prove the government is assembling a straightforward means of giving people a share in their homes.

A Whitehall source said:

“We will launch a much broader consultation than simply on Social Homebuy. It will look at a number of other areas of homeownership and at the sort of products we want to see in the future. It will simplify the current situation.”

The government unveiled its intention to add Social Homebuy to the existing range of homeownership products including right to buy, right to acquire, Homebuy and shared homeownership in its first five-year plan Homes For All in January (HT 28 January, page 7).

Social housing providers have voiced concerns over the proposal, which would allow social housing tenants to buy shares in their home – possibly up to 100%.

Judith Winterbourne, regional director for the North and West at William Sutton Housing Association, said: “I would welcome any move by the government to simplify the current situation. Currently, for all our tenants and residents it is a lottery about what grant you are eligible for.

“The system needs to be made simpler and fairer in terms of the differences between the various products. Without this tenants … will be put off by how complicated it is.”

Since revealing its intention to introduce Social Homebuy the ODPM has held a number of closed-door discussions with sector experts to debate the policy.

One of these experts suggested Social Homebuy could prove expensive for associations to run as they would have to chase people who defaulted payments and set up service charge systems for blocks of flats that may previously have only housed tenants who rented.

He said: “If buyers can find someone to lend them the money – and they will – there won’t be that assessment by the registered social landlord of whether they can afford it or not. There’s a danger people will take it on who really shouldn’t.”