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Issue - decisions

Shared Ownership Product

18/03/2021 - Shared Ownership Product

12.1

This policy will provide for the shared ownership model that the Council will implement and the associated model lease that the Council is required to use for Shared Ownership properties owned by the Council. Once in place it will guide how the council will manage Shared Ownership properties delivered as part of the Councils Stock Increase Programme.

 

 

12.2

RESOLVED: That Cabinet:-

 

 

  1. That Cabinet approve and resolve that the Council shall become a Provider of Shared Ownership Homes in the City of Sheffield on or after 1 April 2021;

 

  1. That in pursuance of establishing the Council’s Shared Ownership Homes provision the Cabinet authorise and direct that:

 

  1. The Council shall apply for Homes England funding under the Shared Ownership Affordable Homes Programme 2021-26 (“SO AHP 2021-26”);

  2. Upon acceptance of the Councils application for funding the Council shall thereafter enter a grant funding contract with Homes England in accordance with SO AHP 2021-26;

 

  1. The Council shall adopt and adhere to the Governments Capital Funding Guide and Homes England Model for the Shared Ownership Homes under SO AHP 2021-26;

 

  1. The Shared Ownership Policy attached at Appendix A of the report is approved and shall be adopted and implemented by the Council from 18th March 2021;

 

  1. The Shared Ownership Policy may be amended to reflect any changes in legislation or guidance from the Government. Any material amendments to the Policy shall be undertaken in consultation with, and following the approval of, a Cabinet Review Group that shall be convened for this purpose; and

 

  1. The Cabinet now delegates all authority and powers necessary for the execution of its decisions and directions set out in 1 and 2 above to the Director of Housing & Neighbourhood Services in consultation with the Cabinet Member for Neighbourhoods and Community Safety subject only to the authority of the Cabinet Review Group insofar as approval for Policy change is required pursuant to paragraph 2.v. above.  

 

 

 

12.3

Reasons for Decision

 

 

12.3.1

  • Sheffield City Council has a shortfall of affordable housing. The annual shortfall in Sheffield is currently estimated at 902 units. This shortfall includes all forms of affordable housing, including Shared Ownership this information is from the SHMA July 2019.
  • Numbers of bids for housing across the city are high for most property types and waiting times are high and there is pressure on existing stock. New affordable homes in a range of affordable tenures, including Shared Ownership will increase the quality and range of housing tenure options available to people.
  • Deposit costs for Shared Ownership are much lower as they only have to get a deposit for the percentage that they are purchasing, for example, a deposit of a 25% share is much lower than the deposit for the full 100% of a property. This means the Shared Ownership route of purchasing a property is once again easier for people who cannot save or have a deposit ready. 
  • This Strategy is aligned with current corporate priorities and supports the Council’s ambition for providing a range affordable homes in the city.

 

 

 

12.4

Alternatives Considered and Rejected

 

 

12.4.1

Do Nothing - One alternative is not to develop a Shared Ownership product and rely on other Council programmes to provide affordable housing in the City. Although this is an option to consider, Shared Ownership is a product that provides a route towards home ownership which meets the aspirations of Sheffield and is at the forefront of future government funding for affordable housing. By not offering this option in Sheffield, our citizens have fewer options than in similar cities.

 

 

12.4.2

Develop a Sheffield Model for Shared Ownership – Although the Council could use HRA budget to deliver a Sheffield Model the ambition is to deliver 3000+ affordable homes which will only be possible with the HE Grant funded contribution which requires us to use the HE standard model. There is also the point to consider that the more caveats or rules the Council have with a Sheffield own model the more restrictive and less inclusive the product could be. Mortgage lenders, insurers etc are familiar with the standard model. A step away from the standard model might mean mortgage and insurance options are reduced for potential purchases, which could lead to more restrictions and the product being able to reach less people.

 

 

12.4.3

Develop a Person Led Model – The Council has considered a person led model which allows the customer to purchase existing properties on the open market then the Council will purchase the S/O shares. This model allows the Council to access Homes England Capital Grant Funding. The changes to the HE model which place responsibility on the Council for some repairs in the first 10 years only applies to new build properties and so would not apply with this model. There are currently only two other councils who use this model and so there is not much evidence regarding this method. We have therefore discounted this as an alternative at this stage until the Council can gather more information and until the Council are familiar with delivering the standard model.

 

 

 

12.5

Any Interest Declared or Dispensation Granted

 

 

 

None

 

 

12.6

Reason for Exemption if Public/Press Excluded During Consideration

 

 

 

None

 

 

12.7

Respective Director Responsible for Implementation

 

 

 

Executive Director - Place

 

 

12.8

Relevant Scrutiny and Policy Development Committee If Decision Called In

 

 

 

Safer and Stronger Communities Scrutiny Committee