PRESS RELEASE (6th October 2015)
Heylo Housing Limited (“Heylo”) is bringing the affordability benefits of shared ownership to Local Authorities and Housing Associations looking to deliver rented affordable housing.
Using Let’s Share, Local Authorities and Housing Associations acquire 40% shares in the properties at 60% of open market value (OMV) via 125 year market standard shared ownership leases and receive a blanket consent from heylo to sub-let the properties to tenants on whatever terms they decide.
Nicholas McAlpine-Lee, CEO of Heylo said “Let’s Share brings the affordability benefits of a shared ownership solution to Local Authorities and Housing Associations looking to maintain a supply of new rented affordable housing delivery. The Local Authorities and Housing Associations buying a share have effective full ownership, just like any other shared owner. The embedded discount and shared ownership offer results in a much lower cost of delivery than traditional Section 106 rented stock.”
Buying a 40% share at 60% of OMV and paying a low rent (starting at 2.75%) maximises financial resources and maintains delivery. The full occupation rights of the standard form shared ownership lease and blanket consent for sub-letting ensures full control over the lettings to tenants. In the future the Local Authority or Housing Association can sell their share and realise the value from the embedded discount as well any increase in the value of their share.
Nicholas McAlpine-Lee again, “Based on a £160,000 property this means that Local Authorities and Housing Associations can acquire a single unit of Section 106 affordable housing for 24% of open market value, just £38,400, and cover their costs (the Let’s Share rent, their own management and any maintenance) through sub-letting at a rent of less than £97 per week.”
Developers receive 60% of the full open market value on Section 106 rented properties which means that, in today’s constrained environment, allowing the rented element of Section 106 to be changed to Let’s Share delivery will enable Local Authorities and Housing Associations to continue to supply rented affordable housing.
The "Let’s Share" shared ownership solution has been developed to complement heylo’s existing affordable housing solutions - “Home Reach” (a consumer shared ownership solution) and “Your Front Door” (a mortgage free shared ownership discounted market sale solution).
Currently operating in over 40 Local Authorities Heylo is a joint venture with a leading Local Authority and is backed by significant pension fund investment. For more information on Let’s Share, Home Reach and Your Front Door visit www.heylohousing.com.