£4.1bn increase in Shared Ownership Funding

Stop Press!  £4.1bn funding announced for 135,000 new shared ownership homes

The Government and the Homes and Communities Agency has issued a prospectus inviting a wide variety of organisations to bid for a total of £4.7 billion of capital grants for the development of shared ownership (SO) and other affordable homes.

As an expert provider of advice to the housing sector, Sharratts’ lawyers are well versed in the rules and practice relating to grant funding, shared ownership development and disposals.  We look forward to working with you to make the most of the  opportunities provided by the new grant funding programme.  For further advice, please contact Sarah Jarvis, telephone: 01959 568 017 or email: sarahj@sharratts-london.co.uk  or Ben Halsey, telephone 01959 568014 or email: benh@sharratts-london.co.uk

Brief details of the new funding are set out below. 

The prospectus, entitled “Shared Ownership and Affordable Homes Programme 2016 – 2021” (SOAHP 2016 – 2021), was issued on 13 April 2016.  A link to the prospectus (available on the Homes and Communities Agency’s web pages) is set out below:-

The new funding is intended to provide 135,000 new SO homes, 10,000 rent to buy homes and 8,000 units of supported and/or older peoples’ rental accommodation.

SOAHP 2016 – 2021 funding will sit outside the current programme of Affordable Housing funding and represents a tangible sign of the current Government’s ongoing objective of supporting (affordable) home ownership, as evidenced by the fact that 88% of the new funding is allocated towards new SO accommodation.

Key aspects of SOAHP 2016 – 2021 are as follows:

• funding is intended to support development of new homes outside of Section 106 Affordable Housing requirements on new developments sites 
• funding is to be made available to a wide variety of potential bidders, not just existing registered providers of social housing – given the flavour of the prospectus document, it is clear that the Government wants to attract innovative collaborations between entities within the wider residential property (development) sector, including investment from and ownership by institutional investors
• the move to increase SO housing delivery envisaged by the new funding is supported through other Government initiatives, including the removal of restrictions on the type of organisation which can hold an interest in SO in the long term, and the relaxation of eligibility criteria applicable to SO housing accommodation – in particular the household income thresholds that apply inside and outside of London 
• funding will be administered by the HCA, through its investment management system (IMS)
• Although it is not clear, it is understood that inside Greater London, funding will continue to be administered by the GLA 
• modern and innovative methods of construction, including offsite construction, will be encouraged 
• funding will be ‘regulated’ contractually though heads of terms and model contact documentation – those familiar with the existing HCA Affordable Housing Programme will no doubt find that similar model documentation is utilised – however draft heads of terms/model contract documentation for SOAHP 2016 – 2021 funding is yet to be made available
• in addition, new funding will include requirements regarding ‘firm schemes’, ‘indicative schemes’ and ‘nil – grant’ schemes, again concepts which will be familiar to those already allocated grant funding by the HCA and/the GLA under existing programmes