Ownplace article in The Observer, Sunday January 27 2008

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Discount plan giving leg-up to buyers will fight blight

Dan Cook reports on a housing association scheme that aims to revitalise run-down areas

Life can be cruel at the bottom of the property ladder, so a scheme offering buyers a 25 per cent discount on a Victorian terraced house almost sounds too good to be true.

Anyone who cannot otherwise afford their own home is eligible for the scheme, called Own Place, which is currently operating in parts of the north west. The offer comes with strings attached, but they are conditions that the scheme's operator, the The Riverside Group, hopes will help to revitalise city streets blighted by boarded-up properties, buy-to-let landlords and short-term tenants.

In return for the discount, worth tens of thousands of pounds, buyers must agree to live in the properties for at least five years, or else pay the 25 per cent discount back to Riverside. They must live in the houses themselves, pledging not to rent them out.

All the properties on offer were previously vacant for a long period or had been rented out by the housing association for many years, and were mostly in poor condition. Riverside will carry out structural repairs and some improvement work to bring them to a standard that allows buyers to get a mortgage.

The first phase of 21 buyers under the Own Place flag are moving in this month to their two- and three-bedroom homes in Liverpool and the Wirral, having completed their purchases late last year. The next release of properties, planned for later this year, will be of 44 houses in Liverpool and around the north west.

Among the first wave of buyers is Pamela Harrison, who completed her purchase through Own Place in December. Her new home in the Wirral is a 100-year-old, two-bedroom terraced house that she bought for £48,750 - nearly £20,000 less than its full market value. Pamela, 26, who works as a receptionist and administrator for a building contractor, said the discount 'made all the difference' in allowing her to buy her own home. 'I'm on a very low income and was living with my parents. The most that I could borrow was £50,000, and there was nowhere, not even a flat, that I could buy for that money,' she says. 'I love the house. It's really spacious, with a dining room, living room and a massive bathroom.'

Although she says the house was 'a real bargain', it has not been plain sailing so far. It had been standing empty for eight months and was in a 'shocking' condition, she says. 'The front door and back door had to be fixed. I've had to spend £1,000 getting some damp sorted out and another £500 getting the electrics checked.' Despite these difficulties, which have set back her moving-in date, Pamela speaks highly of the programme: 'It's a brilliant scheme to get people on the property ladder.'

John Williams, a surveyor from estate agents Brennan Ayre O'Neill, was a member of the working group invited by Riverside to come up with innovative ways to dispose of housing stock that it was no longer economical for the association to manage. The group has 50,000 properties on its books, worth a total of £1bn.

Williams says Pamela's house was part of a 'mini-pilot' scheme within the Own Place programme, where buyers were given the 25 per cent discount but no improvement works were carried out to their homes. He says that idea was quickly shelved, but adds that Own Place is only able to operate because Riverside did not completely renovate the houses - not, for example, to the standard it would for a rental property. 'That allows the housing association to sell the houses at a lower price, so the affordability is there [for buyers].'

He estimates that on average, £12,000-£14,000 was spent by Riverside making each house structurally sound. 'Some had structural damage, were boarded up with sheet-metal curtains, and I did wonder when I walked around them initially whether they'd ever be habitable again. The transformation has been remarkable,' says Williams.

Own Place properties are grouped together, which Williams hopes will help to rejuvenate urban areas: 'A lot of these places will start to look better with refurbished houses and a higher ratio of owner-occupiers. They will hopefully go from being areas where people don't want to live, to areas where they do.

'In Bootle, we've done 10 houses in the same small street. Leveraging that amount of money - firstly public money from Riverside, then private money from owner-occupiers - will have a big effect. One of the Own Place properties needed to have the front walls taken down and rebuilt - that's the kind of condition it was in. There is great potential to improve these areas and our owner-occupiers hopefully will build up a lot of equity as they improve.'

Pamela Harrison's house is in a part of the Wirral she has known for some years because a close friend lives nearby, and she reckons the scheme is already changing the area. 'You can tell the difference already. When my friend moved in, all there was was scallies running up and down the streets. It's already starting to look different.'

Most Own Place buyers so far have been first-time buyers in their twenties and thirties, and Williams says the cooling of the housing market he has noticed on the commercial side of his estate agency over the last three months has not filtered through to the scheme. 'Perhaps that's not unexpected: there is a group of people who have been denied home ownership for a number of years and they are very committed. The fact that they are getting a discount also perhaps removes fears of a downturn.'

If there is a drawback to Own Place, it is only that demand has been too great: there were five applicants for each of the first 21 properties released last year. Williams expects a similar surge of interest when the next 44 properties are released, in South Wallasey in the Wirral; Picton, Lodge Lane and Holt Road in Liverpool; and Parr and Haydock in St Helens. Work is due to start in March.

With continued investment from Riverside, the scheme is likely to offer more potential first-time buyers the chance to get out of rented accommodation or leave their parents' homes, and bring more owner-occupiers to run-down areas. Perhaps now that the idea has been shown to work, other housing associations will launch their own versions. 'It has the potential to hit a wider audience,' said Williams.

· Own Place, 0151 343 1170,

Further details available from Alix Bell, Group Communications Officer The Riverside Group 2 Estuary Boulevard Estuary Commerce Park Liverpool L24 8RF Tel 0151 295 6340

link to the original article on the guardian website