News
Performance Review 2005
Monday 27 June 2005
Northern Ireland's regional body for shared ownership is set for a major expansion in activity over the next 3 years.
The Department for Social Development is to pump an additional £39m into the Co-Ownership scheme, government's local initiative for affordable home ownership, over the period – a sum which will enable an extra 2,400 households to get onto the property ladder at a time when increasing numbers of potential first-time buyers are being priced out of the conventional housing market.
Presenting the organisation's annual performance report and strategic review at W5 in the Odyssey Centre (27 June), Alan Crowe, Chief Executive of Co-Ownership Housing, said it was poised to increase its financial commitment to aspiring home-owners by 22% - or £10m – this year alone, making a total investment of £54m in bricks and mortar.
Mr Crowe, one of only ten Chartered Directors in the province, added: “Over a three year forward planning period, this commitment is expected to continue to rise, resulting in the provision of 800 further homes annually, or a total investment of £100m in additional Co-Ownership homes”.
The scale of the expansion in Co-Ownership's activities can be gauged from the fact that it purchased 502 homes – two more than its target – in the last financial year, fully utilising its government grant allocation. Mr Crowe commented: “This level of activity represents a significant achievement in an unfavourable property market for our clients”.
Co-Ownership boasts an impressive balance sheet for the past year. Total expenditure was £30.64m, of which £18.76m went to purchase homes chosen by clients and £10.2m was returned to the Department for Social Development as grant repaid. Income totalled £41.99m, with £25.13m, or 60%, of this derived from the sale of Co-Ownership properties. The proportion of income not recycled within the year was fully committed at year-end to support further property purchases for clients within the period of the current funding plan.
People buying through Co-Ownership can choose eligible properties with a price ceiling of between £102,500 and £115,000 depending on where they are sited within the province. The scheme works by enabling clients to part buy/part rent the property of their choice, depending on their means. They can start off by buying a 50%, 62.5% or 75% share on which they pay a mortgage and pay rent on the remainder. At any time they can then increase their initial share, a move called staircasing. Last year 502 clients entered the scheme and 745 existing clients staircased. Staircasing is the key to Co-Ownership's successful financial performance. Last year it accounted for 60% of income with the most of the rest coming from rent payments (9%) and social housing grant from DSD (30%). The average length of time clients spent with Co-Ownership before buying a further share of the property has fallen in recent times from 5.6 years to 3.3 years. An impressive 71% of clients begin staircasing within five years.
Mr Crowe said: “We are very pleased with this achievement, which validates our ongoing efforts to counsel clients before and during their tenure with us so that they derive maximum benefit from their Co-Ownership experience.”
Since Co-Ownership Housing was set up in 1978 it has helped 18,500 people get a foot on the property ladder. And it has proved a good investment for clients. Their average return on leaving Co-Ownership rose by 14% last year to £16,777. While the average price of property purchased roseby 8% to £75,370, he average single client income fell by 2% to £13,845 in the last financial year reflecting how Co-Ownership is of real benefit to those on the property owning margins.
This year Co-Ownership is a winner in the CIPFA Public Reporting and Accountability Awards 2005 for its corporate reporting of 2004 and the efforts it made to be transparent and accountable, the first time a Northern Ireland organisation has been highlighted in this way. Mr Crowe said:
“Modern accountability involves the provision of clear, timely, information about what the organisation has been doing and what it plans to do. We are working hard to get across to the whole community why we are here and what value we can bring for people who need a helping hand onto the property ladder. We're very proud that the efforts of an organisation like ours with a lean staffing structure and tight operating budgets have been recognised in this way”.
Co-Ownership offers a free, confidential advice service for anyone hoping to buy a home and wondering what they might afford to go for. Contact Co-Ownership Housing direct on freephone 0800 333644.
