Two new housing schemes that will make affordable homes available for first time buyers and lower income households will be discussed by the Council’s executive when they meet next week (Weds 7 March)
In October 2017 the executive agreed to establish a Housing Affordability Fund (HAF) that will bring together various funding streams – including s106 Planning funding and other Council funding – to be used flexibly to subsidise affordable housing schemes across the city and complement higher value development in the city.
The fund presents the opportunity to invest directly into making housing affordable and create new and innovative ways for Manchester residents to buy and rent good quality affordable homes.
Rent to Purchase pilot
The cost of renting and saving at the same time are limiting people’s ability to save for a mortgage deposit and, as a result, the current average age for first time buyers in Manchester is now 37.
Manchester’s Rent to Purchase model will help working households who want to be home owners but don’t have enough deposit or the bank of mum and dad to get a high street mortgage. The scheme will be marketed as deposit free purchase as opposed to a rented house that can be bought by the tenant as we are seeking genuine owner occupiers who want to buy a house but cant raise the deposit.
The initial pilot scheme will build 48 new homes across six small infill sites – eight for rent to purchase, 20 shared ownership and 20 for outright sale – to start on site in March 2018.
Rowlinsons Construction will purchase the six Council-owned infill sites and build the homes, 28 of which will be sold to Mosscare St Vincent's (including the eight for the Rent to Purchase pilot) who will be the housing provider to the tenants/buyers. The City Council will have an equity share in the Rent to Purchase properties that will be recovered when each is sold.
The pilot scheme will gain insight into the demand for the product and provide learning for scaled up schemes at other sites in the city.
Enquiries about the rent to purchase properties should be directed to Mosscare St Vincent’s: www.msvhousing.co.u
Empty homes for first time buyers
Manchester’s existing housing stock presents one of the largest opportunities to support lower income households who want to own their own home in to the homes of their choice.
In the last few years, the City Council has been very successful in reducing the number of empty homes, but as national funding comes to an end, ideas are being developed with both the public and private sectors around the basic aim of refurbishing empties to sell to First Time Buyers or lower income households.
Past pilot schemes have found that this model often requires significant subsidy (up to 19%) to bridge the purchase and refurbishment costs – but savings in the latter and improvements to the supply chain could lower the subsidies required.
An agreement is already in place with Adactus Housing Group to refurbish empty homes for First Time Buyers or owner occupiers and up to 30 homes have already been identified.
An initial investment of £2m could deliver 135 homes if sales receipts are reinvested over several phases.
Cllr Bernard Priest, Deputy Leader of Manchester City Council, said: “75% of the city’s housing stock falls within Council Tax band A or B, which shows that the city has a significant amount of lower value homes to rent and purchase – but the problem is often around the ease of access to these homes, other than the traditional high street routes for mortgages or market rents.
“To bypass the barriers that traditional housing models present, we have often needed to be creative and work with both the private and public sector to deliver accessible affordable homes at scale, which the Council would not be able to achieve without these partnerships.
“We want our residents to be aspirational and realise an ambition to own their own homes, should they want to. Current routes on to the housing ladder are failing our residents, but Innovative models such as this will make home ownership for First Time Buyers or lower income households a real possibility.”