Thousands ripe for intermediate rent

The study, by property market researcher Hometrack, shows 15,000 households allocated general needs homes last year would have had enough income to be eligible for an intermediate rent of 80 per cent of their home’s open market value.

That could have potentially freed up thousands of homes for use as general let, easing pressure on waiting lists.

The Hometrack study looked at the 90,000 housing association lets of two-bedroom homes across England in 2008/09. It assumed that households spend 35 per cent of their income on housing.

The study compared a number of alternative options to general needs provision.

It stated that 8,762 households would have been eligible for a 25 per cent share in a low cost homeownership home, while 8 per cent - 7,556 - would have been eligible for half.

More than a quarter of households - nearly 25,000 - would have been eligible for intermediate rent at 60 per cent of open market value, while 19,096 (21 per cent) would have been eligible for rent at 70 per cent.

The report’s author Richard Donnell said: ‘Against the backdrop of pressure on public finances, a major decline in new supply of housing and a partial re-correction in house prices, there is growing focus on intermediate tenures as a way of easing the pressure on housing need and rising waiting lists.’

Graeme Moran, managing director of Metropolitan Home Ownership, said: ‘As long as people meet acceptable criteria I can’t see a problem with more people having access to intermediate housing.’

The findings follow a call last month from a group of 20 housing associations, backed by the National Housing Federation, to the government to protect shared ownership funding.

The associations, under the banner Promoting Shared Ownership, developed a policy discussion paper pressing the case for a more prominent role for shared ownership schemes.

At the time, Marilyn DiCara, the partnership’s chair and director of Moat housing association, referred to shared ownership as being a ‘uniquely powerful product in the housing market’.

‘It is relatively cheap for the government to fund, it frees up social tenancies and reduces waiting lists, and it supports many first time buyers to achieve their homeownership aspirations in an era of continuing high house prices.’

Kay Boycott, director of policy at homelessness charity Shelter, cautioned against taking Hometrack’s survey too literally.

She added: ‘Lower income households in low cost homeownership typically pay a higher proportion of their income on housing costs, and unexpected outgoings such as repairs and service charges can stretch finances to the limit.’

Have your say

You must sign in to make a comment