Renting And Shared Ownership

RENTING

If you don’t buy your own home, the alternative is to rent. However, there is a limited and decreasing supply of rented accommodation particularly in the private sector. Alongside the boom in home ownership has been an exit from rented accommodation of the private landlord who has found it increasingly difficult to make a reasonable return on his investment following a series of Rent Acts which have reduced his ability to raise rents in line with inflation.

Local authority renting

The largest proportion of rented accommodation is in the public sector provided by local authorities, though cutbacks in spending and the sale of council properties have reduced the total amount.

Not that this accommodation has ever been easy to come by. In most cases, local authorities have long waiting lists with priority decided by need. Most operate a points system – the more dependants an applicant has, the more points and the higher priority. Even then this will not guarantee a home; many families have to wait years in order to acquire a council house.

Housing associations and societies

A limited amount of rented accommodation is also available through housing societies and associations. These are non-profit making bodies which provide housing either through co-ownership or cost rental. In some cases, they operate as charitable trusts and provide accommodation for people with special needs. Public funds are available through the Government sponsored Housing Corporation to ‘registered’ associations while these also qualify for tax concessions and benefits under the Rent Acts.

A recent development has been the sponsoring of housing associations by some building societies.

Further information can be obtained from the National Federation of Housing Associations, 30/32 Southampton Street, London WC2E 7HE, or the Housing Corporation, 149 Tottenham Court Road, London WiP oBN.

Special needs

There may be a need, either by yourself or relatives, for special housing – for the disabled and the elderly for instance. This sort of accommodation is provided by local authorities, housing societies and charities. Most local authorities will have details of all such accommodation so it’s certainly worth approaching them.

Private sector

As we have already indicated, there is not much long-term rented accommodation available in the private sector. Some houses can be found for short periods of a year or two where, for example, the owner is abroad on business. In addition, there are bed-sitters

Right: an inventory of the contain of rented property safeguards the interests of both landlord and tenant.

Below: those with special needs might find it worthwhile to approach their local authority and flats but most of this is purely short-term accommodation.

It is always worth contacting estate agents to see if they have anything on their books. However, the best source is generally the small advertisements in local newspapers. Buy the early editions and if you see a likely property, follow it up without delay – the competition will be fierce.

RENTING WHAT TO CHECK

Many of the considerations for renting a specific property are the same as those for purchasing, though defects in the structure are likely to be the responsibility of the owner or landlord. It is important to check the condition of decoration and, in the case of furnished accommodation, the furniture. A written inventory should be agreed with the landlord, to avoid any likelihood of a disagreement and the loss of your deposit when you leave.

RENTING AND THE LAW

Because of the complexity of the law it is not possible here to give much useful advice as to the operation of the Rent Acts beyond the suggestion to take further advice should you need it! Your local Citizens’ Advice Bureau or neighbourhood Law Centre will be able to guide you on such matters. For more serious matters, a solicitor will be able to provide you with full legal help and advice.

SHARED OWNERSHIP

The concept of shared ownership was designed to meet the needs of those unable to purchase because of price escalation but who wish to become owner occupiers rather than housing association or local authority tenants. They can afford a proportion of the cost of the property and their share in any capital appreciation.

Initially, purchasers buy a long lease at whatever premium they can afford. This is effectively their ‘share’, although they will have the rights and responsibilities of full owners and be treated as such. They pay a rent to the landlord on the ‘share’ they have not acquired. Later, as their financial circumstances permit, the terms of the lease allow them to increase their ‘share’ by paying additional premiums, or to purchase outright.

In essence, the original finance can come from three sources:

– Non-repayable housing association grant via the Department of the Environ ment and the Housing Corporation usu ally in the order of 40 per cent of cost.

– A long-term mortgage from a local authority, usually about 10 per cent.

– The balance from the sale to individuals of leases representing half the value of the property upon which they raise personal mortgages. This is where the building society can assist.

The Housing Act 1980 made it possible for the housing association grant to be paid to registered housing associations where part of the equity is to be sold. The buyer need not necessarily find any capital in that the building society can often grant an advance to cover the whole of his share. 39

Renting And Shared Ownership

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