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Housing: Shared Ownership for the Elderly

Volume 704: debated on Thursday 30 October 2008

asked Her Majesty’s Government:

Whether they plan to review the policy on the shared ownership for the elderly scheme.

My Lords, the shared ownership for the elderly scheme is a useful housing option for older people. It forms part of the Housing Corporation’s affordable housing programme for 2008-11 and, along with other low-cost home ownership schemes, is kept under constant review. From 1 December 2008, the new Homes and Communities Agency will be responsible for funding affordable housing schemes.

My Lords, I thank the Minister for that reply. I understand that some housing associations are willing to allow residents to fund care and support, but the associations have to use their own resources to do that. Given the Government’s commitment to personal budgets and choice and the huge worry about the costs of care that many people face, will the Government consider changing policy to allow downward staircasing in all shared ownership housing, which would enable residents to fund care and support in this way?

My Lords, the noble Baroness knows that I am very sympathetic to innovation in how we use our housing funding as a link with health and preventive and social care for older people. I know that RSLs use their own money for this, but I am not convinced that buying back shares in shared ownership homes to help older people is the most appropriate role for social housing grants. Essentially, we need to build more homes, as the noble Baroness knows, and more quality homes for older people, not just the traditional residential homes. But I hear what the noble Baroness says and I shall discuss with her the scope for innovation across the field.

My Lords, I declare an interest as chairman of the Hanover Housing Association, which provides several thousand homes for older people, including through the excellent shared ownership scheme. Perhaps I could ask the Minister a question relating to younger shared owners, as they form a particularly vulnerable group at this time of recession. They were marginal home buyers; now mortgage repossessions are running at some 45,000 per annum and nearly 1,000 families a week lose their homes through mortgage repossessions, with all the horrors that go with that. Will the Minister use her considerable influence with the housing associations and the Homes and Communities Agency to try to ensure that there are rescue packages in place for those shared owners who run into mortgage difficulty so that perhaps they can sell back the share that they have purchased from the housing association, become tenants eligible for housing benefit and stay put where they are, so we do not see the horrors of homelessness that follow from repossession?

My Lords, the noble Lord is quite right and makes a powerful case to which we would all want to respond. Young shared owners will be eligible for help with their mortgages if they fulfil the criteria of vulnerability for the new mortgage rescue scheme that is in development now. In addition, he is quite right in saying that RSLs have the option to buy back shares if shared owners cannot keep up the payments because of a change in financial circumstances. They have the discretion to buy back a share or buy out owners so they can reoccupy the property as a tenant. I would be very happy to discuss those measures in more detail with the noble Lord, because our department is looking at all ways in which to free up the housing market and support home owners at the moment.

My Lords, those in this vulnerable group, the elderly, have, like others, huge difficulties selling their homes because of the housing slump, getting loans or mortgages because of the credit crunch, and suffer around double the official inflation rate as a higher proportion of their income goes on food and fuel. Is not that exactly the type of vulnerable group that the Prime Minister said that he wanted to help?

Yes, my Lords, we are doing a great deal. Interestingly, the affordable homes agency, the Housing Corporation, has relaxed its bidding round so that it is able to respond to registered social landlords who want to specialise in providing homes for older people. Bids are coming forward and the proportion of the funding going on homes for older people is increasing. However, the noble Lord is quite right: because we are concerned that older people do not have sufficient choice and quality in their housing, we last year produced a document, A National Strategy for Housing in an Ageing Society that addresses long-term issues as well as putting forward specific short-term help for older people.

My Lords, returning to the shared ownership scheme for the elderly—the current scheme—I understand that there have been only 500 completions since 2001. I am sure that the Government would not be so cynical as to introduce a scheme that has low take-up, so can the Minister tell the House what research the Government have undertaken, particularly into the marketing of this and similar schemes?

My Lords, it was always intended as a small and specific scheme for older people with very small incomes. Many of the people who qualified had incomes of less than £10,000, so it was never intended as a massive expansion for older people. I can verify that the scheme is based on research. We need to bear in mind that about 12,000 units are provided for older people from 100 housing associations. As I said, because we are concerned about improving access, the Housing Corporation is freeing up its bidding processes and offering incentives to local authorities to come forward with more allocations. We are looking at an expansion in what we are providing.

My Lords, in her initial response to the noble Baroness, Lady Greengross, my noble friend used the words “affordable housing”. Is there a definition of “affordable”?

Yes, my Lords; it was in the homes and communities Act last year. Affordable housing includes homes for social rent—what we traditionally called council housing—and homes that are below market cost when they are sold for people in shared equity schemes or provided with financial support.