Category: Shared ownership

shared ownership

13 points you MUST cover in your Shared Ownership sales policy

Shared Ownership Sales Policy is very different from social or affordable rent. It’s not just about who gets a home. There’s a cascade of consequential policy decisions that influence procedures and development contracts. You also need to address regulatory requirements and have clear procedures that lead to excellent customer experience. 

Here are the SDS top tips on what should be covered in a robust sales policy:

1. Customer Group
Funding streams, the Capital Funding Guide and Regulator. Policy around the target customer group is as fundamental to shared ownership as it is to social or affordable rent. However, depending on your funding stream, this policy decision will be strongly influenced by the capital funding guide and regulator.

2. Registers & Application Forms
Your own register, other registers and purchaser application forms. Whether or not you keep your own register of potential shared owners, there are other registers available which in some cases regulation will insist you use. Policy on how and when you access registers needs to be established.

3. Eligibility & Affordability
Regulation and the Homes England sustainability calculator. If the shared ownership development forms part of a registered programme then the CFG  advises on how you look at affordability. However, there are other factors that need to be looked at when you develop your policy which will be discussed at the workshop. Furthermore, if you are a local authority and developing through your own resources such as the HRA, then you may wish to develop policy independent of that advised in the CFG.

4. Allocation
With shared ownership, it is not usual for purchasers to be ‘allocated’ homes and so policy around choice needs to be developed

5. Drop Out, Re-assign and Reservation Fees
What happens when a purchaser drops out? You need to have a clear policy so your staff understand how they are expected to deal with this. (Will you re-assign if a purchaser drops out and how will you handle reservation fees?)

6. Off-Plan and Show Homes
How do you intend to show people the beautiful homes you are developing? Will you build a view-home or sell off-plan with final pre-viewings? Whichever route you choose, communicate this clearly and make these easy to see.

7. Floor Coverings 
Purchasers will want to measure up if you’re not supplying floor coverings. This can cause time delays and is an extra step which is often overlooked. Your Policy around this may influence your development contract.

8. Timeline
During the sales process, there will be some time-sensitive activities, for example, how long will you give your purchaser to get a mortgage before withdrawing the offer of a home? Your policy needs to outline what these are and think about how they affect the financial appraisal. Is there anything you can do in advance or are there contingencies you could implement?

9. Warranty Handling
Be aware that there could be a mismatch between standard JCT contracts and NHBC warranty.  Policy needs to be developed to deal with this mismatch so the customers can access the warranty should the need arise.

10. Mitigation
How will you handle ‘difficult to sell’ homes? Having a plan in advance is key to avoiding delays and having long term voids. Not only is your policy on this crucial for your business but governance bodies and credit rating agencies are keen to see such policies.

11. Data Protection
Your policy must ensure that data protection requirements are secure and compliant with the GDPR regulations.

12. Related Policies
You will need to consider other internal policies that may have an influence eg. Appeals and Complaints, EDI policy.

13. Review
Some aspects of your sales policy may need to change as your capability develops.

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Greg Warner-Harris

Greg Warner-Harris

Greg Warner-Harris has worked in the low cost and assisted home ownership sector since 1997. Greg and his teams have been responsible for bringing over 2,000 New-Build Shared Ownership and other intermediate purchase products to market. Before creating Domus IMH, Greg was the Sales and Marketing Director for a major developing housing association and its commercial subsidiary which sold homes on the ‘open market’ to generate cross subsidy for the social parent. As Senior Partner for Domus IMH, Greg brings his experience & expertise to provide cost effective specialist services to the wider sector.

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Getting the right housing delivery team in place

Local Authorities: Getting the right housing delivery team in place

Housing delivery team

If you’re a Local Authority that has decided you want to start doing housing delivery for yourself, you’re going to need the right delivery team in place.  You may have existing staff with related skills, but if you haven’t directly delivered any housing for a few years, it’s highly likely that those in-house staff will struggle to get up to speed confidently and competently without a lot of support. Your current internal procedures and financial regulations will also probably need overhauling to suit the activity and give your team a clear fit-for-purpose structure within which to work.

Different Local Authorities decide to develop houses for various reasons.  For some it’s to increase the supply of all housing or only affordable housing, for others it’s to diversify housing stock, or it could be for income generation.  Your reasons will be tailored to your local circumstances, and you should get an approved strategy in place to articulate those. Your intentions and purpose will influence the most suitable methods for delivery.

One option would be to use the expertise of a partner organisation, which could be a nearby Local Authority that’s already delivering, or more likely a partner Registered Provider with a suitable track record to act as your Development Agent.  If you take this route, it’s recommended that you have an empowered and experienced member of staff on your team who can coordinate the client function. They would act as the interface with your Development Agent and administer a Development Agency Agreement that sets out the scope of the service, standards, fees, etc.  

The benefits of Development Agency are that you don’t need to retain an expensive team and the ongoing costs associated with it.  You get direct access to experienced staff with all the right tools already in place to support you in your aims. The downsides are that it’s harder to build internal capacity if that’s your longer-term aim.  It may also be difficult in some geographical areas to find a Registered Provider willing to allocate some of their resources to generating housing that won’t belong to them. If you have your land and can share the new housing generated with them in suitable numbers, then that may well prove sufficient incentive.

If you aim to have an in-house team and deliver directly in your own right, you should be comfortable that you’ll be creating sufficient numbers of new homes to make this worthwhile.  The costs, or an appropriate portion of the costs, of such staff, can be capitalised to the schemes they are delivering. This means that you don’t need to allow for a drain on revenue funding if your team are fully employed in delivery.  Of course, the new homes they create will generate revenue too. Setting your financial parameters and using an appropriate scheme financial appraisal tool will allow you to calculate economic impact over the development period and after the homes go into long-term management.

Appraisal tool

It may well make sense for you to share a specialist team between yourself and neighbouring partner authorities to share costs and create more favourable economies of scale.

Getting the right staff in place will quite likely be a challenge for all sorts of reasons.  Assuming you don’t have current experience in housing delivery, there’s no shame in accepting you won’t necessarily know what kind of people with what kind of skills you need.  

Perhaps you have a contract with an employment agency you could call upon.  Be aware though, that if you don’t know what you need, they will need to be a pretty specialist agency to correctly interpret your requirements and find you the right type of people.  Getting the recruitment right is crucial to your organisation’s success, so investing in some consultancy assistance here is highly advisable.

There are a limited number of people out there with the right skills, and the sector, in general, hasn’t been good over the years at training people in this specialism.  Having transferable skills is great, but this is a niche activity with added layers of specialist compliance. If you get things wrong, there can be some heavy prices to pay with the risk of reputational, financial and regulatory damage.  

You may also come across salary and benefit package issues.  Development staff are well remunerated for their skill set, and within a Registered Provider, these roles will usually come out pretty high up the salary rankings.  More often than not, they’ll also get a car allowance. You’ll need to find out what the current going rates are in your area and work out how you will be competitive as a potential employer.  Local authorities have a much better pension scheme on offer, so that’s worth emphasising. A good pension scheme is worth having. You might also offer flexible and home-based working opportunities, paid professional memberships, generous holiday allowances, training and CPD opportunities and so on.

Local authorities

Now let’s be frank … amongst many Registered Provider employees, Local Authorities seem to have a reputation as a less attractive place to work.  You may be up against this reputation, deserved or not! So, you would benefit from selling yourselves as the great, dynamic, groundbreaking, worthwhile organisations that you aspire to be!  

Many development staff went into the sector because giving something back to the community motivated them, and they enjoy being part of creating something tangible.  A lot of them have been through several major restructures and mergers, which can, of course, be very unsettling. They may have started their careers delivering bespoke schemes on a small scale, but now find themselves churning out large numbers of S.106 affordable housing requirement units where they have limited input and not much room for imagination.  Perhaps they started in the sector working for a fairly small housing association with a few hundred or a few thousand homes and now find themselves working in a very corporate environment with tens of thousands of units. Their work drivers are likely to be very different in that larger organisation, where ‘big finance’ has a major influence on development activity.

Contrast this with working for a Local Authority.  You’re going to be delivering homes within set geography, so the chance to know your area and the people you serve  … and potentially a lot less travelling! The proportion of S.106 affordable housing numbers in your portfolio may be a lot lower, and by contrast, your work could well be a lot more varied and creative.  The money you’re spending on new homes is less likely to be coming from bond finance, so the ‘big finance’ drivers that now prevail in Registered Providers fall away, which could mean a less bland workload.  You can deliver schemes purely because they’re what is needed in a locality, rather than because they’re needed to feed the machine. It might be easier to balance a programme of schemes with some money-spinners that cross-subsidise some less financially attractive proposals.  An attractive selling point as an employer could be all the reasons why Local Authorities are the new Housing Associations!

Housing delivery team

If you’re still struggling to recruit the right people, never be tempted to settle for the not-quite-right people, or the downright wrong people, just because they’re the only ones that applied.  Recruit for relevant experience, proven track record and attitude. If they don’t tick those three boxes, then they’re not going to get you where you want to be regarding delivery. It would be much better to get in interims and specialist consultants with experience at a strategic level until you can find the right people.  Those same interims or consultants will probably be able to help you find the right people. They should also be able to up-skill a handpicked selection of your in-house staff with transferable skills and an interest in your development aspirations.

Now a note on where to advertise roles.  Most development specialists are actively seeking a change of job are most likely to go to Inside Housing as their first port of call – on their website and in the weekly magazine.  LinkedIn and social media are also ideal places to post job adverts and ask people to share. Use any liaison or partnership meetings with Registered Providers and Local Enterprise Partnerships to let people know you’re recruiting. Wherever you advertise for staff, ensure the benefits of working with you and your organisation are clear.

If you’ve come across people that know what they’re talking about, informally invite them to apply, or ask them if they know of anybody who could be suitable.

When putting together an interview panel, you need at least one person involved who knows housing delivery inside out.  This is a specialist field, and it would be effortless to ask the wrong questions, not recognise the subtleties of a right answer, or be unable to uncover just how much experience someone has through probing.  You need to find out how your candidates are likely to fare working within a new team where some of the rules are not yet written. Depending on your development strategy, there could be a need for razor-sharp negotiating skills, the ability to broker flexible yet regulatory-compliant solutions, or a call for out of the ordinary due diligence.  Risk management will be critical, especially as development is capital-intensive.

Once you have one or two experienced people in place, you may want to consider growing your talent pool in this area.  New entrants to housing delivery in the social sector have been limited for some years, and there appears to be a decreasing number of people to choose from.  Running an in-house bespoke course is an option, or a mentoring programme using experienced professionals. This presents an excellent opportunity to grow an area of expertise that could be marketable to other authorities who aren’t as far ahead as you.

By the time you’ve got your team in place, you’ll want to retain them.  Regular reviews of progress in a lively culture which values continuous improvement make for an attractive place to work. As is getting new homes delivered at the same time as minimising the bureaucracy of decision making.

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Fiona Astin

Fiona Astin

With over 20 years experience in the affordable housing sector, Fiona brings extensive experience in the management and delivery of large programmes of residential housing at a strategic level. Following a career as Head of Business Development at Synergy HG and Regional Development Director at Aster Homes, she is now part of a cross sector network of Built Environment Exports offering support in delivering sustainable places where people want to live

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Appraising a Scheme

Shared Ownership in the Local Authority Sector

Selling Shared Ownership Today in the Local Authority Sector - Part 1

Shared Ownership

As the renaissance of development activity by local authorities continues to gather pace, shared ownership development is starting to come into the conversation. This really should be no surprise, because although assisted home ownership schemes have come and gone over the years, shared ownership has consistently been helping people get on the home ownership ladder. And while there were some co-ownership type schemes dating back to the late 1960s, it was a local authority that gave birth to shared ownership as we know it. Birmingham City Council’s 50:50 Scheme was launched in 1975 and is widely acknowledged in the sector as the forefather of contemporary shared ownership.

With more than 35 years passed since that groundbreaking initiative in the Midlands, shared ownership is as relevant today as it always has been and arguably more so in this age of austerity. While there will still be the debate about what is the greatest need and where resources should be targeted, whatever the tenure being looked at, the root of our housing crisis stems from the fact that we are not building enough houses. With shared ownership we get more bang for our buck- we can just create more homes with the resources available because the customer is funding part of it. In days gone by, shared ownership would not have found favour amongst some local authorities because they wanted to concentrate their resources on those in the most perceived need. However, the sector has matured over the years and now acknowledges that the desire for home ownership in Britain is so strong, we cannot ignore that desire. Rightly or wrongly, like warm beer and cricket, homeownership is part of our DNA.

Local authorities all over the country are starting to embrace shared ownership as they move into development. One example of this is Cherries Court, Bournemouth. Although Bournemouth Borough Council restarted their development activity a few years ago, Cherries Court, completed in December 2017 was its first shared ownership development.  There were over 150 enquiries for the eleven 2 and 3 bed family homes, and they were all reserved off plan 10 weeks before practical completion. Most purchasers were moving in only one working day after practical completion. Gary Josey, Director of Housing and Communities at Bournemouth Borough Council, is in no doubt which direction Bournemouth will be moving:

“At Bournemouth, we need more housing of ALL tenures. Not only does it address a pressing need, but housing development stimulates the economy and ferments regeneration. With the overwhelming success of Cherries Court, shared ownership is certainly going to play an important part in our development programme as we move forward.”

So rather than shunning a tenure that has undoubtedly helped thousands to home ownership since the Birmingham initiative in 1975, now is a good time for local authorities to embrace shared ownership and include it in their development programs.

In fact, local authorities have an advantage over traditional housing associations when it comes to ensuring their shared ownership developments benefit their local communities. By developing outside a Registered Programme, local authorities can mandate that purchasers have a local connection. This is in contrast to housing associations where, since a ministerial announcement in 2016, it has not been permitted to insist on such conditions if the homes are being built as part of a Registered Programme, (which with very few exceptions, is the case). We will look at this in more detail later in this article.

Sales and Marketing of shared ownership is very different to allocating homes for social or affordable rent, but it is an essential element of modern development within the social sector. In this article, we will be looking at the full story of selling shared ownership, to demystify it for new entrant local authorities, and to outline where SDS can help local authorities embrace it as part of their development programme.

Read the other articles in the series

Selling shared ownership today in the local authority sector – Part 1

Shared ownership culture – Part 2

Shared ownership, begin with the end in mind – Part 3

Shared ownership, time to get underway – Part 4

Shared ownership, the marketing plan – Part 5

Shared ownership, brand and branding – Part 6

Shared ownership, the ultimate sales strategy – Part 7

Shared ownership mortgages and conveyancing – Part 8

Shared ownership, it’s not over when it’s over – Part 9

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Greg Warner-Harris

Greg Warner-Harris

Greg Warner-Harris has worked in the low cost and assisted home ownership sector since 1997. Greg and his teams have been responsible for bringing over 2,000 New-Build Shared Ownership and other intermediate purchase products to market. Before creating Domus IMH, Greg was the Sales and Marketing Director for a major developing housing association and its commercial subsidiary which sold homes on the ‘open market’ to generate cross subsidy for the social parent. As Senior Partner for Domus IMH, Greg brings his experience & expertise to provide cost effective specialist services to the wider sector.

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