Tuesday, 9 August 2011

Affordable housing and the government's new equity loan scheme a Penzance perspective

Although for donkey's years politicians of every London based party have promised action on affordable housing in Cornwall, none has been forthcoming. Houses in Cornwall are unaffordable to those people that earn the average Cornish wage. If you are looking for a definition of what is unaffordable, scroll through the jobs section of say the Cornishman and note the average wage then scroll through the property section and note the average house price and you'll have some idea what unaffordable is and the situation faced by many in Kernow.
Artists impression of development in Carharrack

So the other day I heard an advert on Pirate FM for the governments new scheme to help first time buyers and I thought great my little family could try that. We rent at the moment and we would like somewhere with a garden for the children and parking would be good too. At our last house the landlord decided to sell up after we had been there a year, so we had to move and we don't want to be in this situation again, especially not with young children. The problem we have faced so far for buying is both getting a deposit together and affording a mortgage that would actually buy a 2 bedroom house, let alone anything else. So the government scheme promises an equity loan (without fees for 5 years) for up to 30% of the value of the property. To qualify your household income has to be less than 60k a year (my wife and I don't earn half that), you have to be unable to afford a house in your area (no problems there then) and you either have to be first time buyers or renting a council or housing association house. Good it sounds promising or so I thought. Then came up to the first problem, for some reason -of which I can't fathom- the money can only be used for specific new builds. So the money can not be used to buy any old house and so the options begin to narrow.

The system is managed by private companies, a firm called South West Homes covers Cornwall and a quick property search reveals that there are a number of properties available under the search term Cornwall West + 2 bed, incidentally the same properties for the 'First Buy' equity loan are the same as those offered for the part rent part buy scheme. There are 8 options, 3 sites to choose from in Camborne, 1 in St Ives, 1 in Sennen, 1 in Porthleven, 1 in Manaccan and 1 in Carharrack. Now herein lies the problem there are none at all in Penzance. Further all the developments are quite rightly designed to fill a local need, so for St Ives priority is given to those with a strong connection with the St Ives, Towednack and Zennor parishes, Porthleven is the same with that parish and neighbouring parishes and the same is true of all of them. So if you live in Penzance not only can you not buy a 2 bed property in the town but you will be at a disadvantage unless you have connections with other parishes.
2 bedroom house in Manaccan

A 3 bedroom search of Cornwall West provides some of the same results (on the same housing estates) but also includes a property in Fowey, quite a wide interpretation of West Cornwall by anyone's standard. There are 10 available sites, the same Sennen, St Ives, Porthleven, Carharrack and Camborne estates as before. The 3 bedrooms not previously mentioned include another St Ives estate, St Erth, Hayle, Fowey and another Camborne development, the St Erth development has so far been the closest to Penzance (about 7 miles), but  for the St Erth development a local connection to St Erth is required. The Hayle development isn't so fussy about a local connection. The 3 bed in St Ives is less specific, simply stating a local connection.
The 3 bedroom house in St Ives

So for most of the properties a local connection is a problem, which is difficult if you do not have family scattered all over the place. Say for example all your family live in Penzance you would not be a priority, similarly if your family live in Gulval/ Newlyn/ Mousehole/ St Buryan etc and you live in Penzance no luck either. Personally my problem is I want to live in Penzance, I like it here, my daughter will be going to school here soon and my wife works in town.Which leads me to wonder how many other people are in the same situation as we are?

In conclusion, the new equity based scheme is a step in the right direction, it does give first time buyers a help with the high costs of house buying and I for one welcome it. However, my personal reservations I am sure are shared by many in my situation who want to live in Penzance and others who want to live in Newlyn or Helston and no end of places in West Cornwall. It is regrettable that the equity loan scheme is not transferable to older houses as this would allow the flexibility to give people in areas without developments a chance to benefit from this scheme.

If you are eligible for one of the developments I have discussed please do go on to Direct Gov to read more about the scheme here: Equity Loans -how they work and the South West Homes website for specific details of houses in Cornwall: Property search page and I wish you the best of luck.
(all pictures taken from South West Homes website).


  1. I was aware of this scheme and, as it is proposed by a political party, I have to be cautious in my commenting for reasons you are aware.

    That said, I proposed a similar scheme some years ago when I was working with the NAEA. It is not a new idea though, as historically, local councils would often act as pseudo building societies; choosing to lend money to purchase rather than to build for rent.

    Perhaps it is something to be looked into again.

  2. Thanks for commenting and a very interesting idea Chris. I think even in these austere times Cornwall Council (and others) could easily use their connections and cash reserves to act as a lender. Food for thought.

  3. Thanks Rob; good luck with your quest for a new home :)

  4. Thanks Chris, still playing the lottery...