Starter homes initiative

Report: 13
Date: 6 December 2001
By: Commissioner

Summary

Following the successful bid for funds, this report provides further information on the proposed implementation of the scheme. Following consideration of the this report by the Estates Sub Committee at its meeting on 19 November 2001 recommendation 2 has been amended and some additional financial information has been added in Section C. A paper on prioritising applications from police and civil staff (recommendation 1) will be submitted to the January 2002 meeting of the Human Resources Committee.

A. Recommendations

1. Members’ views are sought on the proposals for prioritising allocation to police and civil staff applying for Starter Home funds.
2. Members are requested to consider agreeing the cost of the management fees of £240,000 over three years be funded by MPA so that the affordable housing initiative can proceed.

B. Supporting information

1. Following the bid to the Government for funding from the Starter Homes Initiative, the Housing Corporation has now confirmed details to the lead Housing Association, Tower Homes. As a result, Property Services Department proposes to implement the scheme, subject to agreement with the Housing Corporation and the City of London Police (COL) as follows.

2. The Housing Corporation has set a specific target for the number of householders assisted – 528. This in effect limits the amount per award to £29,000. At this level the funds would most effectively be used as subsidised mortgages providing up to 75% or £29,000 as an interest free loan, which ever is the less. As funding is a fixed amount for three years, it may be advisable to initially set the limit at £25,000. This would provide flexibility to increase the sum slightly in the later years to reflect any rise in house prices.

3. After allowing for a proportion of funding for COL officers, the MPA will be looking to assist 475 officers. If ratios of police to civil staff are applied the target for police officers would be approximately 350 and for civil staff approximately 125.

4. Government protocols require that neither those assisted nor their partner have previously had ownership in any property and that the combined annual income of the household is below £42,000.

5. It is suggested that these protocols should be extended to encourage retention. They should assist those police officers who have successfully completed the first year of their probationary period and are no longer eligible for provided accommodation (as long as provided accommodation is available) and who need to be encouraged to stay in London. However, it is not permissible to impose restrictions that require redemption of the allowance should an officer leave the Service but not wish to move home, e.g. an officer joining a Home Counties Constabulary.

6. Additional protocols for civilian staff should concentrate on aiding those officers with at least one year’s employment with the MPA and give priority to civil staff supporting front line policing when assessing applications against availability. Assistant Commissioner, Human Resources Directorate will provide guidance on the relative priorities.

7. When a property is sold, the mortgage is redeemed by the equivalent percentage of the price; i.e. 75% loan on a £100,000 property subsequently sold for £150,000 requires a repayment by the officer of £37,500. All the sums repaid can be reused within the scheme for further loans. There is a requirement that homes must be within a reasonable travel-to-work-time. It is recommended that the London police scheme be restricted to homes in London boroughs unless an officer is stationed in an outer borough where a Home Counties district (or borough) adjoins London, and offers more reasonably priced property.

C. Financial implications

1. The management fees for this initiative are payable by MPA and COL Police to the housing association. The fees are based on 1.75% of the grants, which will total over three years £240,000. There may be a small number achieved in the current financial year leaving an estimated £110,000 for funding in financial years 2002/03 & 2003/04. This is required as “pump priming” to secure the £13,775,000 to aid retention and recruitment of officers.

2. These were identified as unfunded in the Property Services Department bid for 2002/03 but have not yet been confirmed as included in the MPS budget bid.

3. The administration costs of the scheme are required to be borne by the sponsoring organisation so that the maximum amount of grant is available for its primary purpose.

4. The scheme is aimed primarily at retaining police officers and key civil staff. MPS Human Resources Directorate advise that the full economic cost of recruiting and training a Constable is £13,000 (excluding salary).

5. Some of the officers who will take up this scheme occupy residential quarters rented from the MPA. This will enable them to vacate the properties and make these available for new recruits. Unless quarters are recycled, the Authority might have to consider purchasing or renting replacement property, average house prices in London are circa £160,000 and a housing association rent is about £4,800 per annum.

D. Background papers

Previous report to MPA - Affordable Housing 19 September 2000.

E. Contact details

Report author: Trevor Lawrence, Director of Property Services (in conjunction with Personnel Department).

For information contact:

MPA general: 020 7202 0202
Media enquiries: 020 7202 0217/18

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