Optional Extra - March 2007
Welcome to Optional Extra. Every month we'll update you about what's happening in the world of housing and disabled people and, of course, at Ownership Options. We'll be covering subjects such as the changes in legislation affecting adaptations, the roll-out of the Homestake homebuyers' scheme and developments in benefits-based mortgage lending for disabled people. Along the way, we aim to highlight cases of good practice as well as examples of the bariers faced by disabled people in their search for decent housing.
We welcome your comments, and suggestions for subjects to be covered in future issues, which can be emailed to optionalextra@ownershipoptions.org.uk. Feel free to forward the newsletter to your colleagues, who can subscribe by emailing us at the address above quoting "subscribe" in the subject line.
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.
Whilst the conventional (new build) Homestake scheme is targeted at low income first-time buyers in pressured areas, it also provides financial support to disabled people who are moving to more suitable housing being built by a housing association. Disabled people must contribute a minimum of 51% towards the cost of the property, but can purchase a larger or more expensive property, or have a higher income, than non-disabled homebuyers and still access the scheme.
These exceptions also apply to the Homestake Open Market scheme, which has been used to good effect to help disabled people in Edinburgh and the Lothians. 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 be purchased, for example, near employment or family support, which in turn can reduce dependency on benefits or reduce support costs.
We’ll bring you more information about the Scheme’s roll out in future editions of Optional Extra. If you’re interested in finding out more about how Homestake differs for disabled people, we have information available on our website. If you’d like to know more about the Open Market Scheme, the Initial evaluation of the Open Market Homestake Pilot has just been published by Communities Scotland.
Timescales for new housing adaptation grant scheme unveiledCommunities Scotland this week laid out the timescales for the consultation on, and commencement of, the remaining local authority powers included in the Housing ( Scotland) 2006 Act. One of the most significant parts of this for disabled people in the private sector is the new Scheme of Assistance, which will replace the current Housing Improvement and Repair Grant regime.
Under the current scheme, a local authority must provide a grant of at least 50% of the cost of the provision, or alteration, of toilet or washing facilities they have assessed a disabled person as requiring. They can only choose to provide, or not provide, a grant for any other adaptation.
Under the new Scheme of Assistance, the same requirement to provide grant funding for toilet or washing facilities remains. Local authorities will no longer be able to choose not to provide assistance for any other adaptation, but this assistance can be in a variety of forms, including information and advice, loans or grants.
Research is due to be performed by Communities Scotland on the need for these options to be limited to grant funding for adaptations other than toilet or washing facilities. The means test, which determines the exact amount of grant, is also due to be reviewed.
Communities Scotland aims to consult on the new powers in the autumn, and commence them in the spring of 2008. They also hope to be able to give local authorities some flexibility in the timescale for adopting their new powers under the Act. We’ll keep you informed.
Does a disabled homebuyer have to queue?Homes For Scotland, the Scottish home builders’ representative body, recently contacted us with an interesting query about the Disability Discrimination Act (DDA). It followed a suggestion from a member of the public that it would breach the DDA if a disabled person was expected to queue to buy a house at a house builder’s marketing suite.
The query is interesting because it covers an ill-defined area of the DDA. Whilst Part 3 of this Act covers the general provision of goods and services to the public, its subsection covering the 'management and disposal of premises', which includes the letting and sale of houses, imposes slightly different duties.
The DDA and goods and services
The main section of Part 3 of the DDA requires providers of goods and services to make 'reasonable adjustments' for disabled people in the way they provide a service. Hence, for example, banks now provide counters that a wheelchair user can see over and publications in alternative formats.
Homes For Scotland’s query is similar to that of whether a disabled person should have to queue for the cinema. The Disability Rights Commission, whose duty it is to oversee the enforcement of the DDA, is of the opinion that the Act means that whilst a disabled person cannot expect to ‘jump’ a queue, they may be entitled to a reasonable adjustment to enable them to queue. This might involve, for example, the provision of a chair.
Premises and the DDA
Strangely, the subsection of Part 3 that deals with the disposal (which means 'sale' in this context) of premises never included such a requirement for 'reasonable adjustments.' The result has been much discussion about whether estate agents, for example, are required to make the same 'reasonable adjustments' as a bank or cinema. The Disability Rights Commission's view is now that an estate agent, or house builder, is selling 'goods' (albeit very large ones) in the same way as a bank and it therefore does need to make 'reasonable adjustments'.
So, in Homes For Scotland’s case, the cinema rule would seem to apply. The disabled person cannot expect to jump the queue, but it may be necessary for a house builder to provide a reasonable adjustment to allow them to queue in the same way as other people. This could, for example, mean providing seating for them, or shelter if it is raining and they are unable to protect themselves from getting wet.
Of course, a more pragmatic solution would be to assist everyone - and not just the disabled person - by taking potential purchaser's names and giving them a queue number, as is the practice at delicatessen counters in supermarkets. Potential purchasers could then be allowed to wait somewhere more comfortable or go away and come back at an appointed time.
You can find out more about how the DDA applies to housing in the Disability Rights Commission’s Code of Practice, Rights of Access: services to the public, public authority functions, private clubs and premise
Is a benefits-based mortgage only available to those who are moving home?
In last months Optional Extra we explained how benefit recipients could receive additional benefit to repay a mortgage taken out to move to a property more suited to the needs of a disabled person. The relevant benefits are:
- Income Support
- Income Based Job Seekers Allowance
- Pension Credit (Guarantee credit)
There is, however, another rule which can be useful for tenants who wish to buy their home. In what we know as the ‘water to wine’ rule, a claimant who takes out a mortgage to acquire a home which he or she then occupies, or continues to occupy, as their home can receive additional benefit to repay the interest on the mortgage if they were previously in receipt of Housing Benefit.
Restriction on the size of mortgage
Using this rule limits the size of the mortgage to the amount of Housing Benefit previously received. For example, if a social housing tenant is receiving £50 Housing Benefit per week, and receives this 50 of the 52 weeks every year, they'd receive £2,500 per year which is equal to £208 per month.
Taking out an interest only mortgage from a regular lender can cost around 6.5% at present (if the lender will accept benefit income). A mortgage of around £37k would cost £208 per month and this would therefore be the maximum mortgage that could be taken out.
Why use the ‘water to wine’ rule?
This rule can be a good option where privately renting tenants wish to buy the suitable house they live in as a tenant. Private rents, and the Housing Benefit they attract, are higher and can therefore lead to larger mortgages being available.
Alternatively, many people use this as a way of exercising their right to buy in social housing. With a discounted purchase price available, it is often sufficient to obtain a mortgage through converting a Housing Benefit claim into Mortgage Interest payments.
The usual warnings
Anyone thinking about using this rule needs to get written comfort from their local benefit office that they'll agree to the conversion from rent to buying and then find a mortgage. Only the interest on a mortgage will be covered by the benefit. This makes taking out a capital repayment loan risky, since the amount of interest paid each month will decrease in line with the increased amount of capital being repaid. Interest-only mortgages can be better suited, and an endowment is overlooked for capital purposes.
Tommy’s 7 years as a homeowner
Tommy has a learning disability and had lived in Lennox Castle hospital for 40 years when it was announced it was to close. Tommy wasn’t in contact with any family members that he could move in with. If he was to move from the hospital he needed to be near friends, and in particular Andy who worked at Lennox Castle and lived in Kirkintilloch.
Tommy looked for a rented property from the local council, private landlords and housing associations but there wasn’t anything available. He needed a 3-bedroom property to allow room for a flatmate and carer to stay overnight but there were already many families on the waiting list for such properties. Inclusion Scotland, who provided Tommy’s support, asked us to look at his options.
The solution
Buying a home would mean Tommy could get a house that met his requirements in the area he needed to be. Ownership Options helped him to calculate a budget for buying and to find the necessary money.
Since Tommy was, in effect, made homeless by the hospital closure, and because there were no suitable rented houses, Communities Scotland provided Special Needs Capital Grant via Ownership Options to help him buy a house. We then helped Tommy arrange a mortgage with the Bank of Scotland for the rest of the money.
The mortgage is financed with additional Income Support mortgage interest payments. Such payments can be used to buy a home if a claimant takes out a loan, or increases an existing loan, to buy a house that is more suited to the needs of a disabled person than their current home.
How did it happen?
Tommy needed help with all the decisions and understanding the complicated processes of buying his house. He gave a Power of Attorney to Gerry (his advocate) so that he could act in Tommy’s best interest to buy the house.
On the fourth attempt he bought a house with the help of Inclusion Glasgow and Ownership Options. He also got a grant of around £4500 for the additional support, materials, housing costs and furniture related to getting his own home. His flatmate helped him with cooking meals, shopping and maintaining the house.
Bringing the story up to date
Tommy has lived in the house for over 7 years now and is still very happy and enjoying his home. He has a busy social life, with a large circle of friends. People choose to spend time with him, and he is invited out to lunch, to barbecues and to the pub. Football is still very important to him. He has a holiday every year, sometimes in Spain, which he looks forward to.
At first Tommy required a lot of support and a flatmate. Today he needs only occasional overnight support and his flatmate has moved on. He is managing to budget his benefits to pay his bills – with guidance from his friends. His main support has dropped down to 5 hours per day. Inclusion Scotland does keep time aside to cover occasional overnight support for holidays, or illness – or if there’s been a special party!
There are some concerns about the cost of his mortgage, and his Care Manager monitors that his Income Support Mortgage Interest payments are correct. He is managing financially, but there is little cushion to pay for repairs and upkeep. This is a concern for all homeowners, and we always factor in a weekly sum for maintenance when calculating if ownership is feasible, and advise clients to set this sum aside.
Job opportunities with Ownership Options and Communities Scotland
We have 2 vacancies for Advice Workers, both on fixed term contracts for 1 year. You’ll get the opportunity to gain knowledge in our unique area of work whilst being paid £22,560 p.a. Secondees will also be considered. You can find more information on our website.
Alternatively, Communities Scotland, the Scottish Executive’s Housing and Regeneration Agency, is seeking an experienced equalities adviser or equalities professional. The secondee will advise on equalities issues affecting the overall implementation and development of the Scheme of Assistance provisions within the Housing ( Scotland) Act 2006. A job description, and futher information about the role, can be found here.
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