The various political party's plans to increase social housing and widen shared ownership schemes have provoked comment that they are all are fundamentally flawed.
David Castle, managing director of Council Tenants Mortgages, says:
In 1989 we persuaded the then Housing Minister, Sir George Young to allow the release of Capital Receipts to be ring fenced for new housing projects.
And while what the Deputy Prime Minister is advocating sounds good on paper - 100% of Capital Receipts to be allowed for newbuild - in reality Councils will only get 20% of the right to buy capital and can only use 10% of that per annum!
The Government, the Liberal Democrats and the Tories are all advocating shared ownership schemes, yet the Government is scrapping Rent to Mortgage, which is an excellent scheme.There are 1.25 million council houses that are 'unmortgageable' such as prefabricated reinforced concrete homes. So who is going to fund 'shared ownership' on those? Prescott’s plans under Homebuy, in many cases where the property can be offered at 'part buy, part own at market value', mean a deposit will still be required, as 50% of 100% will still equal a 100% Mortgage, and lenders won't do it.
If you have any comments you would like to add to this story or would like to speak to its author about a similar subject, telephone Matthew West on 020 7484 9893 or email [email protected].IFAonline
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