New discounts for tenants under Social Homebuy

New discounts are being offered to help tenants get onto the housing ladder through the pilot Social HomeBuy scheme, the Housing Corporation has announced.

From April 2008, under Social HomeBuy, local authority and housing association tenants will be entitled to a discount on any further shares they buy, not just on the initial share. 

The Social HomeBuy scheme enable tenants of local authorities and housing associations to buy a share in their current home at a discount.

The Government is already consulting with the housing associations participating in the pilots and key stakeholders on the detail of how to implement this improvement.

Details of the change include:

Social HomeBuy enables tenants of participating local authorities and housing associations to buy a share in their rented home. Purchasers currently receive a discount on the initial share which is pro-rata to the Right To Acquire discount for the area. As part of ongoing improvements to the pilot programme purchasers, from April 2008, will receive a further percentage of the Right To Acquire discount when they increase their equity stake. For example, a Social HomeBuy purchaser buying a 25% share in a local authority area where the maximum discount Right to Acquire discount is £16,000 will receive £4,000 discount on initial purchase and a further £8,000 if they increase their equity stake by a further 50%. The aim to encourage more social tenants to participate in the scheme and to enable more tenants to access home ownership at a level at which they can afford and sustain. Further discount will also be available, retrospectively, to existing purchasers of the pilot programmes if they wish to buy further shares. Further guidance on amendments to standard leases and repayment of discount will be issued by Communities and Local Government and the Housing Corporation in the summer.

Housing Corporation Deputy Chief Executive, Steve Douglas said: "The Government has listened to stakeholders' views on the affordability for purchasers under the Social HomeBuy scheme.

"We are therefore pleased to announce that tenants purchasing a share in their home using the Social HomeBuy scheme will, from April 2008, be entitled to a discount on further shares purchased, not just the initial share.

"We are also pleased that this will be applied retrospectively to include those who have already purchased an initial share during the 06-08 pilot scheme.

"We believe that this development is timely and we anticipate that this announcement will be welcomed alike by both housing association tenants and the pilot associations delivering the scheme."
 
Housing Minister, Yvette Cooper said: "We want to help more social housing tenants to have the chance of owning as share of  their own home.

"This is why we want to make further improvements to the pilot programmes for Social HomeBuy. These changes will significantly increase the available discounts for many tenants who will now be able to get a discount on each share they purchase rather than just the first one.

"Also if more people take up Social HomeBuy, more receipts are available for social housing."

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