A new scheme has been launched enabling local authorities and housing associations to use shared ownership to deliver rented affordable housing.
Let’s Share, launched by Heylo Housing, will allows social housing providers to acquire 40% shares in properties at 60% of open market value (OMV) via 125 year market standard shared ownership leases.
They will also receive blanket consent from Heylo to sub-let properties to tenants on terms of their own choosing.
Nicholas McAlpine-Lee, CEO of Heylo, said: ‘Let’s Share brings the affordability benefits of a shared ownership solution to local authorities and housing associations looking to maintain a supply of new rented affordable housing delivery.
‘The local authorities and housing associations buying a share have effective full ownership, just like any other shared owner. The embedded discount and shared ownership offer results in a much lower cost of delivery than traditional Section 106 rented stock.’
Buying a 40% share at 60% of OMV and paying a low rent (starting at 2.75%) maximises financial resources and maintains delivery, claims Heylo.
In the future social housing providers can sell their share and realise the value from the embedded discount as well any increase in the value of their share.
McAlpine-Lee added: 'Based on a £160,000 property this means that local authorities and housing associations can acquire a single unit of Section 106 affordable housing for 24% of open market value, just £38,400, and cover their costs (the Let’s Share rent, their own management and any maintenance) through sub-letting at a rent of less than £97 per week.'
