History and myths of the Open Market Homebuy scheme for England and Wales
News update on ‘Open Market Homebuy’
Housing associations have not used tens of millions of pounds of the government's housing agencies funding allocation after its flagship scheme ‘Open Market Homebuy’ after the scheme to help first-time buyers proved unpopular and expensive. The real question now is ‘Will the new Government Equity loans make a huge difference’?
The social landlords have struggled to sell the open market Homebuy product since it was launched by the government in October 2006.
The high cost of qualifying for the scheme has pushed it beyond the price range of many public sector workers. In some regions applicants must earn at least £45,000 a year to qualify.
Graeme Moran, director of Metropolitan Home Ownership, said his organisation was unlikely to spend £53 million of the £92 million it had been allocated for open market Homebuy. A revamp of the scheme in July had not gone far enough, he added. 'We do not feel expanded open market Homebuy and the recently announced reforms to that programme in the green paper have substantially improved our ability to fulfil that role,' he said.
Ms Leslie MacNaughton of CTAB Mortgage Desk said that ‘Lenders are certainly not likely to want to fund high multiple ratios in light of the recent affordability calculators changes after the collapse in the sub prime lending market. We are seeing more ‘responsible lending decisions’.
CTAB Mortgage Desk is finding that their new website http://www.sharedownershipmortgages.org.uk is bringing in far more new enquiries than enquiries from her Homebuy Agents referrals.
Housing association Moat saw its allocation cut from more than £19 million to £17 million earlier this year.
Nick Jepps, new business manager at Riverside Homeownership, said open market Homebuy had been 'nothing short of disastrous'. 'Developers are having some trouble shifting property and are giving discounts,' he said. 'People are going with those products rather than getting involved in government schemes.'
Dayton Rogers, marketing manager at Thames Valley, said he was 'optimistic' sales would go up after the revamp. But he added: 'Because of the slowness at the start with the expanded open market Homebuy programme we may not achieve all targets.'
Inside Housing stated in a recent article that:
‘The Housing Corporation refused to say how much money had originally been allocated for the scheme, but said targets set for the coming year would be met.
A spokesperson for the CLG department said there was 'no suggestion that low-cost homeownership budgets are being reduced.’