Jargon Buster

The intermediate market

A new umbrella term that includes AHO/LCHO and also sub market rent properties developed mainly for key workers.

A new concept whereby one housing association is responsible for marketing all key worker homes in a region or zone.

Tenants of local authorities and non-charitable housing associations have a statutory right to buy their homes at a discount from market value. The discounts have been generous and the scheme has been a huge popular success since introduced by the Thatcher Government in 1980. Restrictions to the discounts offered through the scheme have been introduced recently in London to try and reduce the number of affordable rented homes being lost through RTB.

The statutory right that some housing association tenants have to buy their existing home. There are conditions, such as the property must have been funded after 1 April 1997 and the tenant must not be in rent arrears. If the conditions are fulfilled the tenant can buy the property at a discount, currently up to #16,000.

Operates in the same way as RTA except that tenants do not have a statutory right to VPG. The housing association chooses which homes it sells through this scheme.

Through this scheme, council and housing association tenants are offered a cash lump sum to vacate their home. Such schemes are usually targeted at tenants in specific sizes of home that are needed for homeless families.

Soon to be discontinued unsuccessful scheme that attempted to enable tenants to buy an interest in their home by treating part of the rent as a mortgage payment. Very few RTMs have been completed in the country probably because of its complexity.

A scheme where future tenants or shared owners build their own homes. Theoretically this makes the homes more affordable because self builders dont have to pay labour costs but very few self build homes are completed each year.

Properties that are sold outright rather than through shared ownership.

Similar to Build for sale except that it involves existing properties that are repaired/improved and then resold outright.

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Schemes

DIYSO
Do-It-Yourself-Shared Ownership (DIYSO): The Government stopped funding new DIYSO homes some years ago. A small programme funded by some local authorities had continued until more recently.

DIYSO worked in the same way as shared ownership except that instead of being offered a new home, the applicants themselves found a home to buy on the open market. The home could be anywhere in England. Consequently some associations have a few far-flung DIYSO homes in management.

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HomeBuy
An equity loan scheme targeted at council and housing association tenants who would give up rented accommodation for those more in need, by purchasing a home of their own.

A Homebuyer pays 75% of the market value of their home with the housing association providing the remaining 25%. If the home is subsequently resold, 25% of the then market value is repaid to the housing association. The proceeds are all recycled by housing associations to provide more affordable homes.

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Key Worker Living
There are three low cost home ownership schemes targeted at defined key worker groups.

Key Worker Homebuy - This is an equity loan scheme that operates in a similar way to Homebuy. Qualifying key workers can obtain a loan of up to £50,000 to put towards a purchase on the open market. The amount of he loan is determined by what the key worker can afford. Unlike Homebuy, it doesn't have to be 25% of the value.

The loan is only repayable if the property is sold or if the purchaser stops being a qualifying key worker.

At this point, the percentage of the value that was represented by the loan at the original point of purchase is repayable to the housing association.

The proceeds are all recycled to provide more affordable homes for key workers.

London Challenge Key Teacher Homebuy - This is a highly targeted scheme aimed at teachers with specific attributes such as leadership potential, or teaching in a challenging school. The scheme operates in the same way as Key Worker Homebuy except that qualifying teachers can access equity loans of up to £100,000 to buy a home on the open market. These buyers do not have to be first time buyers.

Key worker new build shared ownership - This operates the same way as ordinary shared ownership (see above) except that it is only available to a defined group of key workers. Purchasers who stop being a qualifying key worker have to buy all of the remaining equity or sell the home to a qualifying key worker nominated by the housing association.

Intermediate market rent -These are homes let at maximum rents of 80% of the local market rate. The homes are available to a defined group of key workers. A tenant that stops being a qualifying key worker has move on from the property.

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Shared Ownership
A government funded scheme making home ownership more affordable.

It is also known as part-buy, part-rent because buyers only have to pay for part of the equity in their home. Shared owners pay a subsidised rent on the remaining share of the equity.

Initially, shared owners can buy as little as 25% and as much as 75% of the equity in their home. Any time after the first year, shared owners can buy more, or all of the remaining equity. This process is known as staircasing. The rent reduces by the corresponding percentage as the shared owner buys more equity.

When shared owners want to sell their homes, they are required to ask the housing association to nominate someone to buy their equity share. This ensures homes are kept available through shared ownership. These transactions are usually called resales.

Some shared ownership schemes are specifically targeted at key workers (see Key Worker Living below).

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