Types of Affordable Housing
Affordable housing is a term used to describe different tenures that are more affordable to people who cannot buy or rent a home on the open market. Different types of affordable housing are:
This is subsidised housing that is owned and managed by a Registered Housing Provider (Housing Association) and allocated through Hampshire Home Choice to eligible households. To find more details on Hampshire Home Choice and to look at homes that are available please see the website: https://www.hampshirehomechoice.org.uk/
Affordable rented housing is housing that is owned and managed by Registered Housing Providers (Housing Associations) and allocated through Hampshire Home Choice to eligible households. Rents are no more than 80% of open market rent and in line with the Local Housing Allowance. For more information on Hampshire Home Choice and to look at homes that are available please see the website: https://www.hampshirehomechoice.org.uk/
Shared ownership is designed for people who cannot afford to buy a house on the open market but still want to get on the property ladder. An initial share is bought (usually 25% to 75%) and then rent is paid on the remaining part. There are two monthly payments, one for the mortgage and one for the rent. The other share in your home is owned by a housing association or a developer. It may be possible for you to increase or decrease the share you own later. This is known as stair-casing. When you sell a shared ownership property, the proceeds are split according to who owns what. If you have stair-cased from 50% to 80%, then you would get 80% of the value of the property when you sell it.
The rents are approximately 20% cheaper than those on the open market. Typically, you will sign up to a 6 month tenancy, with a month's rent held as a deposit. Affordability checks will be carried out to make sure the monthly rent is affordable for your household. You will be expected to use the lower rental payments to save towards a deposit to buy another home through the Help to Buy schemes.
These properties are sold at below market value, usually at a discount of between 20% and 50%. You buy the property at a discounted price and own the entire property. Unlike shared ownership, you do not have to pay rent on the remaining share of the property, as there is no remaining share. When you come to sell the discounted property, the saving is passed on to the next buyer so that the property remains affordable. For example, if you pay £80,000 for an affordable property worth £100,000 and it rises in value to £110,000 by the time you sell it, the 20% discount would be passed on and you could sell it for £88,000. Often these homes are advertised in the same place as the Shared Ownership homes on the Help to Buy South website. Other times, they are advertised by the developer for that site.
There is no register to join if you are interested in discounted sales. They are usually allocated on a first-come-first-served basis to purchasers who meet the criteria set out in the legal agreement relating to the property.
Further details of all the different schemes are available at: www.helptobuysouth.co.uk.
If you require any further information on the above, please contact:
The Housing Development Officer
Telephone: 01264 368000