Equity loans of up to £35,000 are to be offered to Oldham and Rochdale residents whose homes have been earmarked for demolition.

Under the relocation equity share scheme, homeowners and tenants in Derker, Werneth and Freehold can get home loans that do not have to be repaid until the property they buy is sold.

The programme is a partnership between Oldham council and the Oldham Rochdale market renewal pathfinder. It will give residents between £25,000 and £35,000 – based on 20% of the value of the property they want to buy. The scheme could cost £40m in total.

The initiative echoes proposals made by the Conservatives in October (HT 8 October, page 10).

It will also be seen as a trial of the equity stakes championed by Alan Milburn and Stephen Byers, the former cabinet ministers preparing Labour’s election manifesto.

When the home is sold, a 20% share of the sale value is paid back to the council and pathfinder. This means if the property increases in value, the amount repaid will also be more than was originally invested.

Homeowners and tenants will be eligible for the scheme if they have lived for more than a year in a property that is due for demolition.

A total of 548 homes in Derker, plus 785 properties in Werneth and Freehold, are scheduled for demolition in the next five years.

Alastair Graham, director of the pathfinder, said: “This is a first for Oldham and the country.”

Source

Housing Today