Merseyside Home Owners Benefiting from Better Homes Thanks to Affordable Equity Loans
A specialist not-for-profit company, ART Homes Limited (AHL) which provides affordable loans to home owners for relocation and home improvement, has successfully tendered for a contract to work with the NewHeartlands Pathfinder and Kensington New Deal for Communities to deliver £11million worth of loans to help vulnerable home owners improve and repair their homes, or re-locate to better homes, on Merseyside.
AHL, a wholly-owned subsidiary of Mercian Housing Association Ltd, an innovative West Midlands registered social landlord, has operated a pilot scheme with the Merseyside NewHeartlands Housing Market Renewal Initiative (consisting of Liverpool City Council, Sefton Council and Wirral Metropolitan Borough Council) since August 2005 to deliver loans to assist home owners affected by relocation through clearance, an element of the Merseyside regeneration programme.
As selected partner for the Pathfinder, ART Homes has assisted home owners, who cannot access mainstream finance, by funding the gap between the value of their old property and the cost of the replacement home.
The pilot loan fund managed by ART Homes was initially established for £1.5million and has helped to fund ‘new’ homes for 70 people with an average loan value of £25,380. The new three year contract will support approximately 700 more home owners in relocation or improvement of their existing home through a range of affordable loan products to a total value of £11million.
Mr and Mrs Allanson from Wirral, who received a top-up equity loan to buy their ‘replacement’ property said: “We love our new house and don’t regret the re-location. We should have done it years ago. The equity loan was our only choice to be able to afford this house. We are really glad that we moved and could keep the ownership of our property.”
Loans provided by AHL in the Pilot Scheme within the Pathfinder areas were Property Appreciation Loans (PAL’s). The PAL is a specially designed product secured against the property with no repayments of capital and/or interest until the ownership of the property changes. The amount of the loan is calculated as a percentage of the current value of the property. The amount to redeem the loan is that same percentage, but of the property value at the time of redemption.. Any increase from the original loan amount to the amount to redeem is recycled back to the local authorities’ loan fund for re-use.
Roger Clark, Mercian’s Director of AHL commented: “We are extremely pleased with our contract in New Heartlands. Extending our presence in the North consolidates our position as a leading provider of affordable finance and shared equity loans. Our unique loan model is proving very valuable to local authorities to help them achieve Decent Homes standards as well as clearance programmes. More importantly vulnerable home owners benefit from better quality properties.”
Pauline Davis, Managing Director of NewHeartlands said: “We’re delighted to be working with ART Homes for another three years. The unique way in which the equity loans are provided is greatly benefiting the residents we are working with and is helping them to achieve their aspirations. We are looking forward to continuing our work together and enabling more people in Housing Market Renewal areas to move to new homes.”
Photo: Mr & Mrs Allanson enjoy playing with their 4,5 year granddaughter Meghan in their new garden.