Published: 26th November, 2010
by PETER GRUNER

A BOLD move to help the low-paid get a foot on the housing ladder was unveiled by the Town Hall this week.

Empty single-bed studio and one-bedroom flats owned by the council are to be sold off for shared ownership to pay for more desperately needed family housing.

The pioneering scheme – believed to be one of the first of its kind in the country – comes as the government has cut housing funding to local authorities by 60 per cent and private developers face the threat of bankruptcy. 

This week, Rok, the firm building the first council houses to go up in Islington for a generation, went into administration. 

The new scheme means that key workers on take-home incomes of £24,000 a year will be eligible to buy homes costing an average of £157,000. They will need a mortgage to purchase up to 40 per cent of the cost of a property and pay the rest – about 60 per cent – in rent.

The scheme is aimed at people on the waiting list with 120 or more points and residents with families who have been established in the borough for many years. Applicants will be given a thorough financial assessment and will need a minimum of £4,000 for legal and survey charges.

Under the scheme, the Town Hall will retain the leasehold of the properties.

Labour housing chief Councillor James Murray said: “Property prices in Islington are sky high and well beyond the reach of the majority of lower and middle-income residents. Selling a number of properties as shared ownership will mean they get a chance to get decent accommodation at an affordable price.”   

There are at least 10,000 council-owned bedsits but nowhere near enough family-sized homes. The aim is that the sale of the affordable flats to residents will pay for new family homes to be built.

Cllr Murray added: “At least 40 per cent of our housing stock represents one-bedroom homes or bedsits. But there is a really pressing need for two- , three- or four-bedroom family housing.

“Previous policies have ignored the enormous problem of overcrowding in many of our homes in the borough.”

Under a pilot scheme, 10 single-bed properties will be sold off for shared ownerships, rising to 60 a year.

The sale of 10 dwellings, according to the council, would raise about £600,000, which would pay for six family-sized homes.

Housing campaigner Dr Brian Potter warned of potential problems for first-time home-owners.

“Remember, these shared owners will be treated like leaseholders and be expected to pay the going service and maintenance charges, which could be pretty high,” he said. 

“You have to have your eyes wide open with a scheme like this.”

Meanwhile, construction firm Rok has gone into administration, leaving a half-finished building site on the Elthorne estate in Archway. 

Work on building affordable homes for the council began two months ago.

Shopkeeper Emrah Karahus, whose store is next door to the building site, said that his customers were being put off because they thought that he was closed. 

 Lib Dem councillor Greg Foxsmith said: “The site is a target for vandals but most importantly we are not getting any information about who, if anyone, will take it over.”

The firm was once worth £437million and employed more than 4,000 people nationwide. Its collapse has been largely blamed on public sector cuts.