Examination of Witnesses (Questions 100-119)
MR ALAN
CROWE, MR
BRIAN HARRIS,
MR MAURICE
BUTLER AND
MS LYNN
PATTERSON
29 MARCH 2004
Q100 Mr Beggs: Do you anticipate any
further changes to the Co-Ownership scheme likely to result from
the findings of the research?
Mr Crowe: The scheme has run very
successfully for 26 years. The Chartered Institute of Housing
also did a research project and in it said, "It delivers
value for all concerned . . . is professionally run with skilled
and experienced staff; it has the confidence and support of lenders;
purchasers like it as well: satisfaction rates for Co-Ownership
compare very favourably with those for other forms of low cost
home ownership". We are a very progressive, open organisation.
We have been delivering on all the recommendations that Baroness
Dean was making for mainland policy. That does not mean that we
are blind to where we could utilise different items in our weaponry
to deliver urban and rural regeneration within our housing remit,
but we can only do that if we get the proper funding. You can
imagine in terms of trying to strategise for the next three to
five years, if we do not know what our funding is going to be
we cannot deliver what we know we are able to deliver in terms
of regenerating the economy, bringing balance into communities
and providing the right housing solutions.
Q101 Mr Bailey: To a certain extent you
have anticipated my question. Perhaps you would elaborate a bit
further on how a more stable funding regime would help you.
Mr Crowe: Three years ago we got
funding for several hundred units. Last year we got funding for
300 units. This year we ended up with funding for 200 units. That
is a major change within a very short period of time. We know
that over the past 26 years we have delivered for Northern Ireland
PLC and we have put a lot of people into home ownership who, but
for Co-Ownership, would not have been there. Therefore, it is
essential from a professional and business perspective that we
have systematic funding that is reviewable on a three-year basis,
we have a proper level of base line funding that meets the 26-year
track record of what an average demand is of several hundred units,
but we also receive funding that allows us to work with other
agencies, like the Housing Executive, housing associations, community
agencies, and we are doing that on the ground. My management team—and
we have got a superb staff—are interfacing with many agencies
on the ground to assess demand and need so that we can go in and
deliver accordingly, but it makes it very difficult to back that
up if we do not know what our funding is going to be. This year
we received our funding at the start and we received £7.9
million, so it was quite a reduction on the £12.9 million
the year before. We received part of that last March and we received
£2.7 million a few weeks ago. It makes it very difficult
to plan what your activity is going to be whenever your funding
is split and the financial year end is tomorrow. It makes it very
difficult to plan professionally, so for those three areas having
a proper system of finance allows me to operate properly within
the remit of the organisation and, more important, get delivery
on the ground.
Q102 Mr Bailey: That is interesting.
Given the assertion that Co-Ownership is a net contributor to
the social housing budget, why do you think it is not looked upon
more favourably?
Mr Crowe: It could be modesty.
Mr Butler: It is unfortunate that
we have got the word "ownership" in our name. It really
is a misnomer to a certain extent and it does mislead people.
Also, we have been so busy over the 25 years in performing effectively
and doing our job on the ground that perhaps we have to share
a measure of the blame that we have not sufficiently devoted ourselves
to telling other people what we are doing and how we are doing
it. I think there has been a certain amount of misunderstanding
as to the purpose and function of Co-Ownership and how it plays
such a vital role—a pivotal role, we would say—in
the social housing programme. I think a lot of people dismissed
us initially as simply a method whereby we staircased people into
ownership. Yes, we do that, and we have to admit we do that, but
you have to look behind that and see where we are starting from,
not just where we have ended up. We accept that we end up with
co-ownership. That is our whole purpose. We are totally focused
and targeted on that. That is our aim. We have no other function.
We want to see people staircase out as quickly as possible, but
where are they coming from? They are coming from the social housing
list; otherwise they would be blocking the social housing list.
It is a means to an end. We have only recently, over the last
two years, started to try and put the image across of what we
are actually doing and we have been much more effective in putting
across our image and indeed we have been helped by these recent
reports; they have done a lot to correct what may have been a
slight misapprehension as to our function within the social housing
programme. Perhaps that helps to answer your question.
Q103 Mr Bailey: Yes, except that I am
a little bit puzzled. You said you have done more to get it across
and yet from what you said you have just had your grant considerably
reduced. That seems to be contradictory.
Mr Butler: There is a time lag.
Mr Crowe: I sit here before you
as a professional banker with 19 years' experience and I am still
trying to work out why it is called a grant when we have received
£7.9 million and in this same year we are paying probably
£10 million back. That to my mind is not a proper and professional
use of funds. We are delivering on all fronts and we certainly
have the support of the Department for Social Development. Our
strategic document fits in with the objectives of the DSD because
we are there to help support community regeneration, build in
mixed incomes, mixed tenure into communities and that fits in
with the Regional Development Strategy for 2025 and PPS 12. Whenever
we are delivering on all these fronts, whenever mainstream housing
policy is now all about mixed tenure, stability of communities,
etc, it does not make sense for this funding situation to continue,
particularly when we are trying our best to deliver on all fronts.
I do not think it is the particular fault of anybody. Budgets
are tight right across the board, but now, if we see all the funding
that is going into health and education and road, which is absolutely
right, the debate for funding becomes academic because if we do
not have people having the right amount of housing to live near
their place of work we are creating a very disjointed solution.
This is something that the Deputy Prime Minister has latched on
to with the £690 million of Key Workers' Initiative. Over
the last 26 years we have helped a lot of key workers because
they have not had the input to get the right home near to their
places of work. What will happen if we do not have the necessary
funding and we have all this investment going into health and
education is that it will create hot spots, mis-spends, not a
balanced economy. That is why this organisation is part of an
overall process, an overall solution, albeit within the housing
remit. That is why in terms of the funding it does not make good
economic sense to receive grant and then pay back more in the
same year.
Mr Harris: Especially, Chairman,
when the two million gap comes at a time in the year when it probably
is of no use to central government anyway because they were rushing
to get the matched schemes completed by 31 March. We could have
done priority schemes earlier if we had had those funds made available,
but that is government finance. You know more about that than
I do.
Q104 Mr Bailey: From the lay person's
point of view it would seem to me that a scheme that met both
certain social objectives and generated a profit and could potentially
generate greater profits in effect would be very commendable financially
because of the potential for generating further profits.
Mr Butler: A lot of our profits
are ploughed back into the scheme.
Ms Patterson: There does appear
to be an urgency about how quickly the profits are received and
the priority is very much how much money will come in this year
and how much will come in next year as opposed to thinking of
the longer term value of how £2.9 million this year will
generate receipts of ten million over five years. That seems to
be an issue we have difficulty explaining.
Mr Harris: Perhaps it is also
worth stating that a scheme is being proposed for key workers
in hot spots in any event and it looks very like ours. It has
been picked up, I think, somewhere else.
Q105 Mr Bailey: Could I inject a note
of caution or circumspection into the proceedings? What would
happen if there were to be a recession in the housing market in
Northern Ireland?
Mr Crowe: We are different from
the mainland in that we never got the massive booms that occurred
in the eighties and nineties in housing prices, but we still have
an affordability issue. With the peace there has been an economic
benefit, there is no doubt, and we are thankful for that. If there
were a recession we are probably talking about affordability gaps.
Whether you are in a buoyant market or whether you are in a recessionary
market you will always get that affordability gap in terms of
house price inflation and income inflation. You find that it tends
to pretty much level out in a recessionary market or in a buoyant
market. We have not had the booms so it is unlikely that we will
get that severe impact from a recession. However, there is still
the affordability gap. There is still an average income in Northern
Ireland economy of £22,308 and an average house price of
£106,000. That does not reflect the average house price on
the mainland where it is obviously a lot higher but we look after
people who are on two-thirds of that income, so it is unlikely
that we will have that recessionary impact but it does not take
away the need to have a bridging agency that will at least help
to promote people from lower margins into home ownership.
Mr Butler: And it is interesting
to look at table 2 in the submission, that buying with Co-Ownership
the weekly average household income is £317 whereas for people
buying with a mortgage it is £620, so we are targeting the
low income families.
Q106 Mr Bailey: So in effect a general
recession and a housing recession are likely to go hand in hand
and that affordability gap would still exist even if prices did
not rise? That is a fair summary of what you are saying?
Mr Butler: Yes.
Q107 Chairman: You will have heard my
comments to the Federation of Housing Associations about the quality
standard of housing that is being delivered and also the need
to promote sustainable and eco-friendly developments. How is Co-Ownership
ensuring that those properties that are part of your responsibility
are of a decent standard and are conforming to the most up to
date eco-friendly standards?
Ms Patterson: In relation to our
scheme, because we are purchasing property on the open market
as opposed to specifying building, to some extent we have an important
role in determining what an adequate standard of property is for
purchasing in the scheme and in doing that we consider that we
are not only safeguarding the public funds invested in it but
also what meets the needs in the short to medium term of the people
who are purchasing the property, so we have a bespoke valuation
system which would be a more developed version of the RICS Home
Buyer's Report, that intermediate level, not a full structural
survey but a detailed valuation of the condition of the property.
From that, which we developed for our own needs over time, we
require the vendors to make good the property to an appropriate
standard. That is very important because we are so active in the
existing property market. Eighty five per cent of the properties
we buy are older and are more likely to be terraced than you would
expect in the first time buyer market because we are working very
much on the margins. What we stipulate is that not only are those
properties refurbished before we purchase so that all the basic
core areas, such as the structural condition of the property,
the windows, the doors, the roof, the electrics, damp-proofing
are all rectified, but people can move into the property, people
who are without savings, without the cash to do work on the property.
They are in a property that they can live in for a few years without
substantial expenditure. Thereafter we monitor our properties.
We have mentioned that we visit about a quarter of the stock,
1,000 houses, every year. We carry out external surveys. We have
commissioned surveys on stock. Our stock is well maintained. We
go down to the stage of cracks in the driveway. Everything is
considered, not just major issues. We help people who have suffered
a change in circumstances through financial difficulties to access
grants to keep the property in good repair rather than letting
it deteriorate. We work very proactively with them, and in a minority
of cases if something does occur in the property that we feel
really needs to be taken care of and the person involved does
not have the financial resources to deal with it, we come to arrangements
with them in terms of making loans available which are repayable
on sale to make sure that the condition is maintained.
Mr Harris: With new build houses
the builders are people who will be members of the National Federation
of House Builders, so they will all be certified houses that we
are purchasing.
Ms Patterson: We are also working
with the EAGA Partnership here in Northern Ireland which is the
agency for the Warm Homes Scheme. All our staff who visit properties
have been trained by them in terms of assessing eligibility and
recommending that scheme and encouraging uptake and we are about
to undertake an advice exercise for all our stock so that they
are aware of that, again to encourage take-up on this.
Mr Crowe: You can see that there
is a very proactive management scenario within the agency and
this allows us to keep tight control with our leaseholders. We
have a stock on average of 4,500 households and we go to at least
a thousand each year. This is a continuing communication cycle
which keeps our householders very informed at all times about
staircasing and any problems with the situation of payment. The
condition of the stock is also continually monitored. That is
a very close proactive situation which probably accounts for the
fact that our repossession rate is 0.2% whereas the repossession
rate on the mainland is about 7.8%, so again that proactive stand
is very efficient, effective, value for money and, more importantly,
it keeps our householders in good space.
Ms Patterson: We have a very clear
time line for people coming through the scheme from people making
inquiries to people applying to people who wish to staircase.
At every stage we have a named individual who is expert in that
area and will deal with individual queries on a personal basis.
We very much believe in the whole concept of contact and advice.
Q108 Mr McGrady: We have heard some comments
this afternoon about the effect of the current planning procedures
and systems and how they allegedly adversely affect new build.
Does it have any impact upon your particular operation? In answering
that perhaps you would take on board the impact of PPS 12 which
we have already mentioned. Would that be helpful or disadvantageous
to you? How will it impact upon your work, do you think?
Mr Crowe: In terms of new build,
obviously the quality of housing stock benefits the public purse
and it benefits our participants because they get a good quality
house to move into. Because of the way the market has gone they
are first time buyers. It is important that the perception is
that first time buyers are not necessarily trainee accountants
or trainee barristers. We are talking about people with very average
incomes of £13,500. If the developers have been following
the market and developers have been building houses that are outside
our valuation limits we are restricted in terms of what we can
go to by the Department. £102,000 is the uppermost limit
we can purchase a house at through Co-Ownership and there is a
limit of £90,000 in most council areas across Northern Ireland.
That in itself limits our ability to go into certain hot spot
areas where prices have exceeded our valuation limits, particularly
for semi-detached three-bedroomed properties, the type of property
that would be ideal as new build for families. I live in a coastal
town where a survey was recently completed that showed that there
were only 11 streets that had permanent residents. It is symptomatic
of tourist locations where you get a lot of second home development
and it means that families cannot afford to live there because
they have been priced out of the market. We cannot go in there
to help because we are priced out of the market too because our
valuation limit is set by the department at £102,000. It
is not only coastal areas. There are other hot spot areas, both
rural and urban, south Belfast, for example, where prices are
going over £200,000, so we are limited. I have had this discussion
with the Department for Social Development and they have intimated
that where we have entered into partnership with another housing
association to develop with the Housing Executive a bona fide
project they will look at giving us discretion to go in there,
but there is no doubt that the valuation limits, particularly
with the prevailing house prices, are curtailing our work as well
as the shortage of funds.
Q109 Mr McGrady: Do you see any argument
for the planning policy to have a provision whereby there is land
set aside for affordable housing, particularly in the smaller
hamlets and rural communities?
Mr Crowe: I think it is absolutely
essential. This is one of the reasons why I called on Radio Ulster
in December for a homes task force basically for delivery of programmes
on the ground for Northern Ireland, local solutions for local
problems, if you like. If we are involved right at the start,
if the planners are involved with the other agencies, if we have
all the agencies integrating effectively at the start of any project
then there is every hope that it will succeed on the ground. We
have a lot of well-meaning people, a lot of super agencies, delivering
where they can. The homes task force that I have called for along
with the Institute of Housing is a mechanism by which we can bring
the relevant agencies together the way they do on the mainland
to deliver the action on the ground, not only strategically but
operationally. Therefore, in terms of making sure that land that
is owned is priced accordingly so that a housing association can
come in and build quite competitively and therefore the price
passed on to the customer is such that the customer is not priced
out of the market.
Ms Patterson: In terms of making
land available for affordable home ownership the demand may well
vary quite substantially between areas so, to build on what we
were saying before about assessing need and affordability, rather
than having a fixed quota or a set number of units we are looking
within each area where we are actively involved in partnerships
in terms of talking to the people there, talking to the community
groups and to local housing associations within the area, to private
developers who are interested in taking on the sites, and we are
assessing specific need and demand in that area which potentially
might include some form of tweak to our product to make sure that
the right sort of affordable housing could be there in terms of
the right volume at the right time and that would be very much
part of PPS 12.
Mr Crowe: We have the operational
effectiveness and capability to deliver. Every year in terms of
the housing grant we receive we are paying it back plus in the
same year. That indicates our ability to deliver what we are capable
of and that is essential in terms of what we are talking about.
Let us take a practical example of a coastal area where the Rural
Housing Association wanted to put some houses for families but
the price of land is such that when they add their building costs
into it they cannot possibly come under the £102,000 valuation
limit, so we are priced out of there and yet those are the very
people that the agency could help.
Mr Harris: On the other issue
that you were speaking about, Mr McGrady, the planning side, we
are developing links with local associations on rural surveys
at present and very much the same thing is happening. We are finding
local community groups who are very keen to have four, five or
six houses built to maintain the school or other facility and
there is land available but no planning, so the situation is back
to where you started.
Q110 Mr Hepburn: What early assessment
have you made of the Barker review?
Mr Crowe: It was very thick. It
took a long time to read. Obviously, it is concentrated on the
supply issues that we have touched on. One of the most interesting
things that came out of it was her call for agencies to work more
effectively on the ground. One of her recommendations—and
there were many—was in terms of (and this applied to the
mainland) various regional housing organisations to be amalgamated.
This goes back to my previous point when I said that if you have
a regional body representing something you have a better chance
of focused delivery and outcomes, not just outputs. In terms of
the supply issues that were coming out there, again we have the
capability to deliver but if we do not have the funding we cannot
do it. Because we have a track record over the last 26 years,
to put it in some context, if you compare 18,000 households against
a population of 1.6 million with the situation on the mainland
with a regional body then you can see where we are coming from
on the importance of having an organisation focused on shared
ownership. In terms of the supply issues we feel as an agency
that we can affect the supply if we have the requisite level of
funds but not only in terms of the average level of demand. I
want to reiterate that. We have an average level of demand for
several hundred units and those are several hundred coming through
the scheme and several hundred going out of the scheme. That is
our base level of demand. We have a wider remit. We strategically
and operationally can affect economic regeneration in urban and
rural areas by giving people on lower than average incomes the
opportunity to go into those areas. This comes back to what Barker
was referring to in terms of mixed tenure. Whenever you bring
mixed incomes into communities you are dissipating wealth within
those communities. That has got to have major benefits for the
economy and this is where we see ourselves as a keystone of that
strategic and operational output.
Q111 Chairman: Everything you have said
so far has been about the benefits of co-ownership. How can we
get affordability to be taken seriously for inclusion in any public
service agreement because at the minute everybody focuses on units
and output, not affordability? How can we change that round?
Mr Crowe: This is where the affordability
index would probably play its part. The Housing Executive has
referred to the affordability index and that is probably as efficient
a measure as any that exists at this moment in time to show where
you can target your resources on a district or regional basis.
If you have an affordability index for your constituency it makes
it easier to say, "We need to put some resources into housing
there to help people where the average house price is this, inflation
is this, but their income levels are that" and if you have
an index that is telling you that you can target funds if you
have a Co-Ownership-type agency to go and get people into homes.
It is as simple as that. We are working very closely with a range
of agencies. The Housing Executive is our strategic parent. We
are working with the Federation of Housing Associations, etc.
We can deliver on the ground—I keep coming back to the same
chestnut. We have all the weapons but we do not have the bullets
to fire. We are not going to make those impacts on social housing
without them. That is what it comes down to.
Mr Harris: We work with units
and costs as well.
Mr Butler: The stop-go financial
policy that we have to operate under is really not conducive to
long term planning.
Mr Crowe: In a professional business
practice if you are making a strategic document for three years
you normally know what you are going to be dealing with. We are
a little bit in the dark in that we are told that we may get funding
or we may not, we may get it now, we may not get it until later
on. I am not talking about coping. I am talking about a professional
operation, which we are, but we need to have a proper funding
support mechanism to allow us to get on with what we have been
doing for 26 years.
Mr Butler: We are not asking for
a vast sum of money. It is just that we need to know in advance
where we are rather than this up-down, down-up situation.
Mr Crowe: I am asking for a vast
amount of money.
Mr Butler: I know you are!
Mr Crowe: I am asking for that
pot of gold you were referring to earlier.
Q112 Chairman: So you want a vast amount
of money but clarity as well?
Mr Crowe: We have delivered and
proved that we can deliver. We have done a lot of research projects
on this scheme. I stress that this scheme should be looked at
in the wider national context because I believe that Baroness
Dean and the Home Ownership Task Force report have made recommendations
that we have been carrying out for 26 years. It is a successful
pilot and a practical example of what can be delivered, so in
looking at the benefits for the various plans that the Deputy
Prime Minister has for the north, for the south east, etc, this
should be the keystone of the mainstream housing policy planning.
Mr Butler: And it is unique in
that because of the structure it starts the leaseholder off from
the very beginning with the attitude that this is his house. It
is not his house; it is within the social housing sector, but
it starts him off with the attitude that it is his house and he
looks after it. He is responsible for the repairs to it, so it
is a home. It is a philosophical approach that really is different
from the ordinary form of social housing. It is a unique form
of social housing forming this bridge.
Q113 Reverend Smyth: You have mentioned
some of the difficulties but I want to raise another one. How
does the Co-Ownership scheme contribute to one of the policies
that the government have, that is, targeting social need, promoting
equality of opportunity and developing sustainable communities?
Mr Crowe: In terms of multiple
disadvantage and social exclusion we are utilising new technology,
a GIS system, to collate all the financial and social information
that we have got on our database so that we can target what monies
we have into those areas that are most deprived. Housing is vital
in neighbourhood renewal and our activity, as you know, is province-wide,
but we prioritise the worst 10% of urban wards and we are looking
on both an urban and a rural basis at working with the agencies
in a working community and housing agencies on the ground to ensure
that we are there in the most deprived areas, for example, Donegall
Pass. There are different issues here. There are racial issues,
for example, and one of our key management team is interfacing
here and is on the community committee at ground level to get
ourselves mentioned in the various meetings and discussion groups
to try to bring shared ownership principles to those areas. We
have streamlined our operation to ensure that the funds we do
have are being targeted to those areas that suffer the worst deprivation.
Q114 Reverend Smyth: You say you consider
the price of housing and the rising prices in that whole area.
Would those that we think need help in targeting social need be
coming in under that at all? I know that you said you are trying
to share ownership but in those areas in particular do you find
a good opening?
Mr Crowe: We are finding very
positive feedback already on the ground in these particular areas.
It might take some time for the planning and for all the agencies
to get together to agree to kick start the programme but we are
certainly making sure that we are there at the very start. The
average house price that we are helping is £70,000, which
is two-thirds of the average house price in Northern Ireland,
so we are already working on those types of level. What we are
trying to do is gear that up even more and, again, if we have
the funding we can really reinforce the delivery on the ground
in terms of management time and energy. It makes it very difficult
to talk to these people when you know you can deliver but you
do not know whether you are going to have the funds to do it.
Q115 Reverend Smyth: So, unlike the others
who are talking about bringing in extra funding from outside,
you are relying more on government funding to help, or are you
seeking to get it from other lenders?
Mr Crowe: No. Do not forget that
we get 50% put in by the private individual, we are supporting
those people that are not totally reliant on subsidy from the
government, so we are helping the public exchequer in that respect.
We are promoting the concept of mixed tenure and mixing up the
incomes by being there in these areas to make progressive changes.
If we have the funds we can gear that up even more whereby in
the worst areas we can be in there at the start and commit funds.
Surely that has to be from the public sector purse, particularly
as everything we make out of the scheme goes straight back into
the scheme. All the staircasing receipts, apart from the repayment
of social housing grant, go back into providing further funds
to support people who are coming into the scheme. If we are given
that opportunity and the right level of funding then we certainly
can progress in the worst areas of deprivation.
Q116 Reverend Smyth: How is the effectiveness
of the scheme monitored in relation to targeting social needs?
Ms Patterson: In relation to the
DSD objectives under targeting social need there is only one specifically
for that and that relates to the number of units. We are third
on the list after the new build development programme of 1,500
units and 75 units for homeless occupation with last year 300
units for co-ownership. The year before it was 600 and before
that it was higher. This year it is 200. That is not a target
in the sense that has any relation to need. That is purely the
number of properties that the Department will be able to fund
with the funds they have available for us. In effect it is not
monitored. Our view is that the other areas within the social
need categories—urban regeneration and renewal, the whole
social structure development—are not monitored externally
and they should be. We are developing our own information base,
using the information that is out there externally, particularly
from the census from the Northern Ireland Statistics and Research
Agency which is developing neighbourhood statistics and the Valuation
and Lands Agency which is developing community boundaries for
property prices. These sorts of things have not been done before
in Northern Ireland. The income indicators in Northern Ireland
do not relate to small areas. That is why we are using our own
research and our own information. We will model the effect we
should have in an area and we will be accountable afterwards for
the effect that we did have providing we had the funding to do
the work in the first place.
Mr Butler: It must be remembered
also that, unlike many other situations which are a burden on
the public purse, in practice the grant in our case is only a
temporary loan because on the average procedures the loan is staircased
out within seven years, so the government gets the whole of its
funding from that particular property back in seven years. It
is pretty good from the public purse point of view, if I may say
so.
Ms Patterson: If I could refer
you to figure 1, the dark area is the proportion of government
funds injected which, as you can see, is hovering between 20%
and 30% of the total cost, so when we talk about 50/50 the remaining
portion of the 50% of public funds is the recycled surpluses from
these properties, so it is not direct funding; it is a very small
public sector investment but a crucial one to enable that to continue.
Q117 Reverend Smyth: I know we can define
social need in different ways but, just as we discovered in certain
parts of Belfast, fathers or mothers from rural areas have been
purchasing small properties for financial benefit when their children
are at university. How far are you finding that a lot of people
who are going into Co-Ownership homes are relying perhaps upon
their parents giving them the finance earlier to help them rise
up the property market? I am thinking of trying to target social
need and I do not think the folk I am thinking of are necessarily
in that category.
Ms Patterson: Normally people
who are coming through the scheme would be from a background where
parents would not tend to have that sort of money anyway to give
them. When we assess anyone who comes through Co-Ownership, Alan
has already mentioned the interviewing process. Before that we
have a formal assessment of those people and included in that
is verification of income and employment. There is a very strong
financial element in all this, so these people are assessed as
unable to afford to buy that property without our assistance.
We are talking about entry level properties. It is something that
we cannot take any further in terms of should their parents later
have money to give them. Three years ago we carried out a study
of people coming through the scheme and as part of that we looked
at people who staircased to see why the staircasing had happened:
had something happened to their circumstances to enable them to
do that? Had they found a partner and they could afford to staircase
or had they come into some money? What we found was that by and
large that was not the case. By and large what was happening was
that these people had no savings, we had put them into a property,
that property had appreciated in value and they had an equity
stake, they had a track record when they left and they were able
to borrow against that. It was because of the scheme that they
were able to staircase.
Mr Butler: But they do have to
be able to get a mortgage so, in the case that you are raising,
if they have not got sustainable income to justify a mortgage
for the 50% share of the property then of course they would not
come into the scheme and a building society would not accept parental
contributions as a sustainable form of income to justify a mortgage.
While we may not be able to give a definite answer to your question,
I think it would be fair to say in all the circumstances that
it would be highly unlikely that anybody coming into our scheme
would be able to rely on parental support. They have to stand
on their own feet. What we are doing is helping people in social
need on low incomes to get into affordable social housing.
Ms Patterson: It is a good question
to ask and it is something that we are very keen to explore further
because it will help us to predict staircasing levels and cash
flow, if you like, of the scheme over the years. There is ongoing
research this year which is being funded by the Housing Executive.
Q118 Reverend Smyth: You heard the discussions
earlier about the various areas: sometimes there are Catholic
housing problems, sometimes Protestant housing problems. How does
the Co-Ownership scheme accommodate what has been referred to
as distinct Protestant and Catholic housing need in Northern Ireland?
Mr Crowe: My personal viewpoint
is that affordability is no recogniser of religion. We do not
discriminate in terms of eligibility for people coming on to the
scheme by nature of their religion. Affordability problems are
right across the board. Therefore, when people come to us we are
looking at social need rather than what the religious situation
currently is. Where we feel we can help is that if we are integrated
more fully with mainstream housing policy at the start and if
there is a need identified by the Strategic Housing Executive
in certain areas where there needs to be direct action taken,
then, because we are a very flexible organisation, we can move
in support of those objectives if we are given the funds to do
so.
Mr Harris: The Catholic/Protestant
housing issue is more an issue of waiting lists and the Housing
Executive, I would suggest. It is a supply and demand situation,
the choice of location where people want to live. There is a shortage
of land in west Belfast and there is a surfeit of land in north
Belfast and there is a political boundary that people do not want
to cross by choice and that is reflected in the points system
on the Housing Executive waiting list. The waiting list does not
apply to us. People come to us to purchase a home in an area of
their choice.
Mr Butler: It is a one-house situation.
Mr Harris: It does not matter
to us whether they are Catholic, Protestant or east Belfast or
west Belfast. We are lucky in that respect. We are out of that
terrible stigmatic situation that other people have got themselves
into in Northern Ireland.
Mr Butler: Our only concern is
low income. We are not going to help people who can afford their
own house. We only help people who cannot afford a house and therefore
they come into this starting point, social housing, and eventually,
with us injecting the right attitude, they staircase towards full
home ownership within a defined period of years.
Q119 Chairman: Do you collect data in
respect of any proportion of the 18,000 that you are supporting?
Ms Patterson: We could attribute
data historically but only in the last three years have we been
collecting that data for people in the scheme in preparation for
our Section 75 obligations, and that is showing a wide distribution
because the house buying process in itself is not slanted towards
one community or another and the fact that people can choose where
they live through the scheme gets over some of the supply side
issues in certain geographical locations. When we talk about becoming
more involved in certain targeted areas where there is more deprivation
and social need we are already involved in those areas on an ad
hoc basis, pepper-potting, dealing with the demand with people
coming to us. We are already housing people, particularly in north
Belfast. It is an area where we are very active in housing but
yet we do not form part of the North Belfast Housing Strategy.
Those are the issues that we are trying to change to join these
things up, so that demand is dealt with holistically.
Chairman: The committee is content. Thank
you very much for your time. If there are issues that you feel
have not been raised or you want to supplement the evidence that
you have already given to us we would welcome that, but on behalf
of the committee can I thank you for the time you have spent with
us and the clarity of your answers. It will be of great assistance
to the committee.
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