Homestake Extra - March 2007
Welcome to Homestake Extra. The newsletter is produced as part of Ownership Options' Homestake Advisory Service for Registered Social Landlords in Scotland. It will highlight cases of good practice and explore issues which have arisen when Homestake has been used by a disabled person to buy a home more suited to their needs. We welcome your comments which can be emailed to homestake@ownershipoptions.org.uk
Information about the Advisory service can be found at www.homestake.ownershipoptions.org.uk. The advice line for RSLs - the Homestake Hotline - can be contacted on 0131 656 6979.
Homestake Open Market opens up across Scotland
From later this year, the Homestake Open Market scheme will be extended to Aberdeen, Aberdeenshire, Moray, Perth and Kinross, Stirling and Highland. The Scheme, which has already helped 523 people in Edinburgh and the Lothians, gives people the opportunity to purchase an existing property on the open market with the help of a housing association.
We’ve used the Open Market scheme to great effect in Edinburgh and the Lothians (see Irene’s Homestake House below, and the story of a disabled person using it reported in our last Homestake Extra edition). The Scheme’s main benefit for disabled people is that the house can be located where the disabled person needs to live, rather than where land is available to build. A home can therefore be purchased, for example, near employment or family support, which in turn can reduce dependency on benefits or reduce support costs.
We’ll be looking further at the use of the Open Market Scheme in the next edition of Homestake Extra.
Selling wheelchair accessible Homestake properties
In the last month we’ve learned that Horizon Housing Association, in partnership with Almond Housing Association, is to sell two wheelchair accessible properties through Homestake in West Lothian. Servite Housing Association is also considering selling similar properties in Tayside. But will they find buyers?
The facts
Looking at the statistics, the answer would seem to be very much ‘yes’. The most recent Scottish House Condition Survey shows a shortfall of nearly 30,000 fully wheelchair accessible houses. Apportioning these in a very rough and ready fashion across the 32 local authorities would suggest 900 households in each area are looking for such houses.
If there’s demand, does this mean disabled people will be able to buy? As you can see in other sections of this newsletter, many disabled people in receipt of state benefits will be able to obtain a benefits-based mortgage to buy through Homestake. Others may well have an existing property that is unsuitable but that could provide sufficient equity to buy under Homestake.
It’s also important to remember that 20% of households including a disabled person are currently buying a house using a mortgage. These mortgages will, in the vast majority of cases, be paid through employment income. Whilst disabled people may be less likely to be buying houses than non-disabled people, there is still significant buying power within this group.
Even with the above knowledge, many RSLs remain concerned about finding buyers for fully accessible housing. After all, many RSLs have faced problems finding disabled tenants to rent their accessible properties. And it’s not as if there is a readily identifiable market in wheelchair accessible properties.
Finding buyers
So how does an RSL find buyers for wheelchair accessible houses? The answer is to raise awareness of the availability in the local area. Buyers will not expect wheelchair houses to come onto the open market, so RSLs will need to inform them that they will be selling accessible homes.
A particularly good way to achieve this, and gain good publicity for your organisation at the same time, is by seeking early publicity in the local press and on television. It’s an unusual story and should catch the interest of local media. Sending information to local estate agents and solicitors may seem an unusual approach but it could catch the eye of someone who has recently been approached by a disabled buyer and who could forward the information to them.
It would also be sensible to contact local authority housing and occupational therapy departments. Whilst they are unlikely to have lists available to match clients to your houses, individual staff members may be able to highlight the development to a particular client. Local charities dealing with disabled people’s issues may also be able to pass on the information to likely candidates.
Finally, if you have a Disabled Persons Housing Service (DPHS) in your area then you should also contact them for help. At present there are DPHSs in Aberdeen, Aberdeenshire, the Borders, East Renfrewshire, Fife, Glasgow and South Ayrshire. Give our Homestake Hotline a call if you’d like more information on these or any other subject covered in our newsletter.
Right Housing, Right People, Right Choices was the Right Conference
Feedback from Glasgow Centre for Inclusive Living’s (GCIL) recent conference on housing and disabled people has been very positive, demonstrating an increasing interest from housing professionals in meeting disabled people’s needs.
The conference, Right Housing, Right People, Right Choices provided an opportunity to hear the Deputy Communities Minister Des McNulty confirm the Scottish Executive’s commitment to equality and choice in housing for everyone. Jacqui Watt of the Scottish Federation of Housing Associations and Mary Crearie of Glasgow Housing Association were also on hand to speak about the social housing provider’s role in relation to disabled people.
We were on hand to run popular workshops on the use of Homestake by disabled people. Other subjects on offer included the Scottish Executive’s work on equipment and adaptations services in Scotland and Glasgow City Council’s perspective on housing disabled people.
Is equity enough?
Many of the calls we receive from RSLs on the Homestake Hotline cover similar topics. We’ve therefore decided to highlight the most common questions we receive in Homestake Extra and start with a very popular query:
Is it true that everyone has to obtain a mortgage when accessing Homestake? What about older or disabled people who may find it more difficult, and may already have sufficient savings to be able to buy?
This is an interesting question. We recently worked with a client who is disabled due to cancer. The nature of the progressive cancer prognosis that she has been given means that she has struggled to find a mortgage lender who would be prepared to offer a mortgage. Given that it would clearly be impossible for her to maximise her income by taking out a mortgage, and since she had sufficient savings and house equity, it was agreed by the RSL in conjunction with Communities Scotland that she could access Homestake using the existing finance available to her.
However, we have come across other cases where the client is an older person, and they are not keen to take out a mortgage at this stage in their lives. In one case, an older couple had sufficient savings to buy a 60% Homestake share (even after deducting the £5,000 that is ignored by Homestake ). They had not enquired about a mortgage as they were not keen to incur further debt, especially as they felt they already had sufficient monies available. However, once they approached a mortgage lender, they were told that it would be possible to afford a mortgage of £60,000. This meant that they were able to maximise their income, but it also demonstrated that this would take them above the financial criteria, and they could no longer purchase a property through Homestake.
The official guidance about this issue is contained within Section 1.30-1.31 of the Communities Scotland’s Homestake guidance. We have also received further clarification from Communities Scotland, which states that
Everyone needs to maximise their contribution to Homestake. If clients can evidence that they are unable to afford a mortgage, then they will not be expected to take out a mortgage – their income should be stripped out of any calculations.
(It is also worth bearing in mind that a person in receipt of a low or benefits-based income may not be able to gather 3 quotes from mortgage lenders, as is stated in the main Homestake criteria. Where a person can justify that they can only obtain one mortgage quote, this is admissible within the Homestake guidance, under Section 1.35-1.36.)
Buying a more suitable house using benefit income
Ownership Options has long been associated with assisting disabled people without an income to gain a mortgage. The rule we most commonly use relates to someone who needs to move to a more suitable property and relies on state benefits for all, or the significant majority, of their income. In such cases much of the cost of buying can be met from the following qualifying benefits, in particular from:
- Income Support
- Income Based Job Seekers Allowance (IBJSA)
- Pension Credit - guarantee credit only
The basic rule
A disabled person, or someone whose household includes a disabled person, who is eligible for one of the means-tested benefits above and needs to buy a property more suited to a disabled person’s needs may qualify for help with buying a house. This help comes in the form of additional benefits to cover the interest paid on a mortgage. The extra benefit is commonly known as ‘housing costs’ or ‘Income Support Mortgage Interest’ (ISMI) payments.
ISMI payments are normally a safety net for people who have an existing mortgage and who become unable to pay it when on means-tested benefits. When a need exists for a house more suited to a disabled person, however, a benefit claimant may be able to take out a new mortgage and receive assistance with the interest payable.
What does the law actually say?
The source of this right to assistance is the Social Security (Income Support and Claims and Payments) Amendment Regulations 1995. Schedule 3 specifies the following:
S4 (7) …housing costs shall be met in any case where a claimant satisfies any of the conditions specified in sub-paragraphs (8) to (11) below
S4 (9) ..The condition specified in this sub-paragraph is that the loan was taken out, or an existing loan increased, to acquire alternative accommodation more suited to the special needs of a disabled person than the accommodation which was occupied before the acquisition by the claimant.
It is important to note the following points:
- S4 (7) states that housing costs ‘shall’ be met, rather than ‘may’ or ‘can’ be met. This means that a claimant who meets the terms of (9) has a legal right to such assistance.
- The rule only applies where ‘alternative accommodation’ is being purchased. It cannot, therefore, be used by a disabled family member to buy their family home from another household member and continue to live in it.
- A property does not have to be more physically accessible to be ‘more suited’ to the needs of a disabled people. It may be more suitable for reasons of proximity to friends, family or support, or because it offers an opportunity for independent living or an opportunity to access education or employment.
- The new house must specifically be more suitable for the ‘special needs of a disabled person’. Problems can occur with a benefit claim when the new house is more suited to the needs of the whole family, rather than just the disabled person, and this resulted in a more expensive house being purchased.
Other important points to bear in mind
Whilst a benefits-based mortgage based on the above rule can be a great option for many disabled people, the following issues should be noted:
- The claimant will usually only receive assistance with the first £100,000 of any mortgage, unless adaptations have been made. If the house is deemed to be in excess of need, or unreasonably expensive, this may be limited further.
- Where a large mortgage is taken out, a claimant may be unable to take paid employment at a later date if their employment income would not cover the mortgage costs previously covered by their benefits.
- It is only the interest on a mortgage that is covered. It is therefore important that the claimant can either take out an interest-only mortgage or has the means to pay the capital repayment element of the mortgage.
- The claimant may have to wait up to 39 weeks for the interest on their mortgage to be repaid if they were not previously in receipt of the qualifying benefits
Irene’s Homestake house
Irene has learning difficulties, epilepsy and mobility problems. She had reached the point where she could no longer manage the stairs in her privately rented accommodation and her local authority was unable to find suitable ground floor accommodation for her.
Her ability to buy through Homestake was made possible by her eligibility for Income Support Mortgage Interest payments (see above explanation of benefits-based mortgages).
In Irene’s case, she was able to obtain a mortgage which, when combined with a gift of £5,000 from her family, gave her a potential 59% stake to put forward. Working closely with Lothian Homes (the private subsidiary of Castle Rock Edinvar Housing Association), Ownership Options and Irene’s sister were able to identify a suitable property within Lothian Homes’ existing housing stock which could be bought as a Homestake ’off the shelf’ purchase. Although the property needed some renovation, Lothian Homes were able to complete the basic improvements, with Irene’s family doing the rest.
The assistance provided through Homestake amounted to a 41% share of the total cost. This proved to be invaluable to Irene, enabling her to buy a suitable bungalow that now meets her needs and which is near to her family, friends and carers.
Irene and her family at the door of her new home.
Housing Information Days at South Lanarkshire Council
We recently helped South Lanarkshire Council explain the benefits of Homestake to people with learning difficulties and those who support them. The events, held in East Kilbride, Hamilton and Lanark, followed consultation activities carried out by the Council into the needs of people with learning difficulties.
The Council learned that disabled people, and their families and carers, felt that there was a gap in information provision. In particular, they wanted to be more aware of the housing and care options available.
Those leading the workshops included Davina Adamson (our Advice & Casework Manager), making families aware of Homestake as a potential housing option. Kate O'Connor was also on hand from the local Communities Scotland office in Hamilton, to offer a brief presentation about the operation of Homestake locally.
Many of those who attended had not been aware that additional assistance was available to disabled people applying for Homestake. Several were also interested in investigating further the option of obtaining a mortgage based on benefits to enable them, or someone they supported, to buy a Homestake property.
Homestake Hotline
If you’ve got a question about how you should operate Homestake in order to ensure disabled people have fair access to the scheme, please give us a call on 0131 656 6979.
For information is available on the website at www.homestake.ownershipoptions.org.uk
In our next issue…
We’ll be looking at what the changes in the building regulations mean for RSLs building new properties, as well as taking a closer look at how the Open Market scheme can be used to assist disabled people.