London’s Barking and Dagenham gave council tenants the chance to buy a share of the equity in their homes through ‘Right to Invest’ in 2016.
Responding to Freedom of Information (FOI) requests Law Question from Internal housingAbout 15,000 residents in the region have confirmed eligibility for the scheme, but not a single sale has been completed.
The government has introduced a similar ‘right to buy’, which gives tenants of rental housing built in the last round of funding the opportunity to buy a share after staying in the property for a year.
Barking and Dagenham’s investment rights scheme for residents who cannot afford full ownership is branded as a “Tenant Shared Ownership Scheme”.
In response to an FOI request, the province said 14,989 tenants were eligible for the scheme, a successful capacity check.
When asked how many have bought shares in their properties, the district said, “None. However, one tenant’s application was recently approved and sent to the legal team to finalize the sale.
A spokesman for the province said it had received “very few” applications for the scheme – just six in the past two years.
The spokesman added that the council “He didn’t know why the plan was unpopular, but suggested a lack of available mortgages kept applicants from pursuing it.
The scheme allows tenants to take advantage of discounts commensurate with the right to buy to reduce the cost of the purchase. You can buy shares starting at 25% of the property’s value while continuing to pay rent on the remaining equity.
According to Barking and Dagenham estimates, a tenant who owns 25% of a £270,000 home and is entitled to a large Right to Buy discount could see their monthly costs rise to £606, compared to £440 a month for a social tenant.
They must also cover between 5% and 20% of the share price, as well as home buying costs such as stamp duty and legal fees.
In return, they will be the lessee in the 125-year lease and will be charged for the maintenance of the property and the service fee for the maintenance of the building.
While the district has some of the lowest house prices in the capital, properties still sell for average Last year £347,675, according to RhythmMove
A spokesman for Barking and Dagenham said: “We assess an applicant’s eligibility for the scheme based on the information they provide on the application form.
However, a tenant must first submit an application and then we will determine if they are eligible for the scheme, following the usual right to buy checks that they are a secure tenant, that they have held the property for at least three years and that the property is their main or main residence.
“Then we check their income and expenses to assess the affordability.
“Most right-to-invest applicants applied for right-to-buy before applying for a right-to-buy scheme.
“So far we have very few applicants and none of them have completed the process.