The National Empty Homes Loan scheme, funded as part of the Community Grants Programme and to be delivered via the charity Empty Homes, is expected to be launched soon.
Dave Stott, the scheme Manager, has been visiting local authorities to discuss how it will work and has kindly provided the following outline to help widen understanding of what is on offer.
National Empty Homes Loan Details
- Maximum Term of Loan 5 years
- Interest rates Fixed 5%
- Repayable monthly by standing order
- Maximum loan amount 15k
- Loan is a subsequent (2nd) charge
- Works to deliver a decent home
- Loan is paid on completion of the loan application not the works
- Property to be let at affordable rent (LHA in many areas)
- Short Hold tenancy agreements accepted
Frequently asked Questions on Scheme Member Duties
A. Are there any capital costs for the scheme member in deploying the loan scheme?
There are no capital costs to members who have been invited to join the scheme.
B. Are there any requirements before the scheme member can signpost an applicant?
There are a number of checks and verifications that will be needed before the property and owner is referred into the scheme. These are listed below:
- To ensure that the applicant is aware of the general terms of the loan this would include payment amounts and contract terms in respect of affordable rents etc.
- A copy of the Land Registry search for the empty property
- To verify the property had been empty for 6 months
- To have seen the property and advise that generally the amount of loan would enable an amount of refurbishment works that would deliver a decent home
- On completion to advise that the property has been completed as per the loan contract
- To offer a new tenant from the General Housing waiting list if agreed
- To ensure the tenant is either paying a rent within a choice based lettings rental scheme or paying an affordable rent and verify that point.
C. Do the scheme members need to produce a schedule of works?
No there is no requirement to have a schedule of works but you will need to advise that the amount of funding applied for will, in general terms, allow the property to be brought up to a decent home standard. Specific to some Authorities who have an accredited landlord scheme they may offer the applicant a free schedule of works that will cover the works however this is not a pre requirement and only the general assessment is required to process the application.
D. How will the scheme member make referrals into the National Loans Scheme?
The scheme member will refer the private applicant and the required information to the National Loans Manager using the set on-line proforma which will be provided as the scheme is launched.
E. Can a property be included in a voluntary leasing or choice based letting scheme?
Yes but not as a prerequisite of obtaining the loan
F. Can a property have more than one grant or loan product combined with the National Loans scheme?
Yes you can mix and match the fund. With the NEHLF being a subsequent charge the ability to combine with other incentives and offers is enhanced
G. Are there any contracts or targets to agree?
No there are no contracts to sign to be included in the scheme. There are no targets to attain but we would expect the scheme member to promote the loan and use the product freely when applicable
H. Will the Scheme Member have to deal with payments or loan contracts?
No that work will be undertaken by the national lender
I. Will the Scheme Member have to deal with defaulters?
Although you may be involved in the discussions on defaulters with the National Loan Manager, work around breaches of the loan contracts and general defaulters allied to breaches of the contracts will in the main be dealt with by the National Loan Manager and the National Lender.
J. Are there any administration costs or valuation fees for the applicant to pay?
No when the application is signposted into the Loans Manager via a scheme member there are no administration fees nor valuation fees. These are covered by Empty Homes. If the applicant is outside a scheme member and applies as an individual through the Building Society there are administration costs and valuation costs of circa £425
K. What other responsibilities will the national lender undertake?
The national lender will upon receiving the loan scheme application complete the following:
- Contact the applicant verifying the application
- Undertake a valuation
- Verify the property ownership details
- Verify the equity in the property
- Verify the rental headroom in the property
- Issue a loan offer letter and a loan contract
- Arrange standing order payments
- Make payment of the agreed loan
L. What are the final processes of the Loan?
The National Empty Homes Loan Manager will contact the Local Authority and confirm the amount of loan and the completion dates to enable the final checks to be undertaken within the Local Authorities responsibilities. In the situations when the loan application has been rejected or the loan offer not taken by the applicant the Local Authority will be notified again by the National Empty Homes Loan Manager with the reasons for the refusal.
If you have any questions or require any clarification please contact the National Empty Homes Loan Manager, David Stott
T: 020 7921 4450
The website page for the scheme is here.
You can also raise questions by leaving comments against this story (logged-in EHN members only)