Sunderland plays with new type of shared ownership

Sunderland Housing Group is considering a version of shared ownership whereby residents pay their mortgages but are not charged rent on the portion of their homes they do not own.

The scheme would mean the association lost some rental income, but could help it to speed up renewal work.

Peter Walls, chief executive of Sunderland Housing Group, said he was in talks with the Housing Corporation about the scheme’s feasibility, but added: “It is very early days and we haven’t ironed all the wrinkles out of it yet.”

The group has a £600m investment programme and expects to build 4000 new homes across the city in the next seven years.

A common reason for delay in renewal areas is that owner-occupiers whose homes are earmarked for demolition do not want to move out because they fear having to return to renting when they move back to the rebuilt estate.

Often they have bought their homes through the right to buy but the compensation they receive through a compulsory purchase order is insufficient for them to buy one of the rebuilt properties.

Traditional shared ownership, where a resident buys part of a property and pays rent on the rest, also lacks appeal for them.

Walls said: “Some people are attracted by traditional equity sharing and some are not. For those who have already crossed over from renting to owner-occupation, money spent on rental often seems like lost money.

“To resolve the problems with this group of people, you have to accept that almost all see their future as being owner-occupation.”

Rising house prices and the right to buy have contributed to the growing cost of regeneration in the region, which delays renewal schemes.

Walls confirmed that the landlord aims to become one of the Housing Corporation’s development partners this year. Partners get the lion’s share of development funding.