HOME OWNERSHIP FOR PEOPLE WITH A DISABILITY POST OCT 2010 David Abbey MySafeHome Limited T: W: E:

OBJECTIVES By the end of the session you will: Have an overview of Shared Ownership pre Oct 2010 Know the changes post Oct 2010 Discover that Home Ownership is still affordable Know the new criteria for applicants Understand the challenges for the future and consider possible solutions

AGENDA Background Shared Ownership pre Oct 2010 Changes from 1 st Oct 2010 Home Owners “Mortgage Top Up” New criteria for applicants Challenges and possible solutions Next step

BACKGROUND Home Ownership gives people with a disability real options - Where they live - Who they live with - Long term security We know people can live independently with support Transforms people’s lives

BACKGROUND Shared Ownership makes home ownership affordable Rent & Service Charge paid by Housing Benefit Mortgage paid by SMI (Support for Mortgage Interest) First person moved in 1999 – helped nearly 1000

CHANGES 22 nd June 2010 Emergency Budget Changes to the way SMI is calculated SMI rate reduced to 3.63% from 1 st Oct 2010

Property Value £160,000 Housing Association Shared Ownership 60% 40% Sale Rent £96,000 £150/m Service Charge – Housing Association (Repairs & Maintenance) £130/m

Pre Oct 2010 BUY ▲ Fees - £3,500 approx ▲Mortgage £96,000 Rent = £150/m Housing Benefit > H/Ass Service Charge = £130/m Housing Benefit > H/Ass Mortgage Interest = £486/m SMI Benefit > Building Society MONTHLY HOUSING COST COULD BE FREE TO HOMEOWNER

Post Oct 2010 BUY ▲ Fees - £3,500 approx ▲Mortgage £96,000 Rent = £150/m Housing Benefit > H/Ass Service Charge = £130/m Housing Benefit > H/Ass Mortgage Interest charged by the Building Society = £486/m Paid by SMI benefit direct to Building Society = £290/m Top up paid by Home Owner direct to Building Society = £196/m

EFFECT ON NEW OWNERS Lenders rate will remain at 6.08% and new owners will need to pay a “mortgage top up” This is £47.12 per week based on a £100,000 mortgage Not affordable to some people – Low rate DLA (Disability Living Allowance) care Could be still affordable for Middle or High rate DLA care

AFFORDABILITY Using an assessment like the Local Authority fairer charging Housing cost will reduce any weekly charge towards the cost of care

EXISTING HOME OWNERS Have a clause in their mortgage that the interest rate charged by the lender will be no greater than the SMI rate for the lifetime of the mortgage Therefore no mortgage top up payable

ADDITIONAL CRITERIA Mid or High rate DLA care Clean credit history No outstanding debts Ability to manage money or support to do so or having appointee/deputy Family support?

CHALLENGES/SOLUTIONS 1)How do we ensure that owners do not get repossessed if payment difficulties? Families helping out/standing guarantor H/Ass stepping in: - Reverse stair casing - Change to rental property - Clearance of arrears then equity return upon sale Local Authorities stepping in: - LAMGS (Local Authority Mortgage Guarantee Scheme)

2) New lender with cheaper rates? KRBS – no deposit and will lend to people on benefits only 6.08%pa 6 national shared ownership lenders % deposits required – will not lend to people on benefits only 3.99%+ - Leeds B/Soc 5% deposit required – will not lend to people on benefits only Variable 6.99% or 5 yr fixed 7.89% Local lenders may be a possibility in conjunction with previous slide

NEXT STEP H/Ass letter to lender confirming how they will support owners who have payment difficulties Continue lobbying Government Need a West Midlands Local Authority to pilot LAMGS