Affordable Housing: Brick by brick...

If you can't afford a home of your own, buy part of it and rent the rest. Nick Lloyd Jones explains how

There are 1,500 housing associations nationwide, managing around 2,000,000 residential properties. They are non-profit making bodies whose main role is to provide new and affordable properties, and to expand their overall housing stock.

Association residents have complained at the lack of opportunity to buy their homes. Various schemes have sought to address this problem: shared ownership; key-worker incentives; and right-to-acquire, which was a bit like the local authority right-to-buy scheme but which didn't offer such generous discounts.

In general, though, it has been difficult for regular first-time buyers to acquire a stake in their association homes as a right. The case of Robert Salmon, 30, and his partner, Liza Weschta, 26, was fairly typical. They had been living in their one-bedroom association flat in Benbow Road, Hammersmith, West London, for four years. "We'd wanted to buy it for a long time," says Robert. "[The association] always said no but we persisted because we figured that the rules might change. A few months ago, we struck lucky and were told that we might be able to buy the place thanks to a new scheme."

This new, government-backed initiative is Social HomeBuy. Yvette Cooper, minister for housing and planning, says it is designed to give people "the chance to buy a share of their own home, even if they can't afford the full ownership costs". It is being administered through the Housing Corporation - an agency that has been charged with regulating housing associations, as well as funding new, affordable housing.

Social HomeBuy was launched in the autumn, when three housing associations - Notting Hill Home Ownership group (NHHO), the Guinness Trust and Places for People - agreed to pilot the project. The NHHO controls about 10,000 homes, mainly around London, Guinness has properties throughout England and Places for People has a national portfolio of around 56,000 properties. Since then, another association, Sovereign - which has about 15,000 properties in the south of England - has joined the scheme.

Each of the associations has employed different tactics in implementing the scheme. The NHHO started with a consultative questionnaire sent out to tenants. "Seventy-five per cent of them said that they would like to become owner-occupiers and 40 per cent of them specified that they would like to buy the property they were currently living in," says James MacPherson, the NHHO director .

On the basis of these findings, the association offered tenants the opportunity to partially or totally buy their properties while paying rent on the balance owing, so that the greater the stake bought in the property, the lower the rent paid. Various discount incentives on a sliding scale were also introduced. To qualify, prospective buyers had to come up with at least a 25 per cent stake but there was no ceiling so, if they wanted to, they could buy the property outright if they preferred.

The target is to sell off around 100 properties annually while ploughing the proceeds back into new-build housing projects. "Thanks to the government grants we receive, we are enabled to channel 90 per cent of the money generated by the sales into building additional social housing," says MacPherson.

So far, the NHHO has received about 30 applications, with more than a third of them at a fairly advance stage. Recently, the first sale was completed.

Robert and Liza, meanwhile, are also well on the way to securing a stake in their £250,000 NHHO home in Hammersmith, having opted to buy a 65 per cent stake of their property. "The beauty of buying under the Social HomeBuy scheme is that you can buy whatever you can afford," says Robert.

For general information on Social HomeBuy, contact the Housing Corporation on 0845 230 7000 ( www.housingcorp.gov.uk) or contact participating housing associations individually by logging on at www.guinnesstrust.org.uk; www.placesforpeople.co.uk; www.sovereign.org.uk or www.nottinghillhousing.org.uk