A RENT to own scheme already operating in the Highlands “beats Douglas Ross’s policy hands down”, a charity boss has said.
In his speech to the Tory conference on Monday, Ross touted a rent to own scheme amid housing market turmoil and fears of soaring mortgage rates following the UK Government’s disastrous mini-budget.
But Ronnie MacRae, CEO of Communities Housing Trust (CHT) who has been running a similar scheme since 2011, said that the Scottish Tory party leader's bid is less “affordable” than the Scottish Government-backed project.
CHT has 63 properties in the Highlands and Islands, including some on Acharacle and Kilbeg, on Skye.
The scheme is based on a loan agreement with the Scottish Government where CHT repay interest on the loan and uses the funds to build affordable homes.
Tenants are chosen from those who meet the criteria for housing needs, rent is charged at a mid-market rate and based on the local housing allowance rate that benefits are paid up to, in case of unemployment, and the property’s price is frozen at the beginning of the tenancy.
Those who take on a property are given five years before they can decide to buy, with CHT giving them between 20% and 25% of their rent payments back so they can afford a deposit.
In Ross’s conference speech, he touted a similar policy - but rents would be at full market price, he only said the government “could” provide a 25% deposit and there was no confirmation that the houses in the scheme would be affordable.
MacRae told The National: “The scheme we use does and has paid it out [25% deposit] and the other thing was there was no mention in Mr Ross's proposal of being an affordable house at the end of it.
“So there’s no proposal for it to be a discounted sale or for it to be protected as affordable in the longer term. It's a fairly short-term proposal.
“I mean, I thought our scheme beats it hands down basically, and it’s been delivered and proven successful.”
CHT’s scheme also guarantees that the property, if resold, will still be at an affordable price, by writing this into the title deeds.
MacRae said that he believed CHT’s existing scheme was much more affordable than what had been suggested by the Tories.
He explained: “I think they were talking about renting at market rents. Our scheme is based on mid-market rent, which is lower, it's based on the local housing allowance rate, which is the rate that a housing benefit can be paid up to.
“In effect, that protects anyone in the scheme from a period of unemployment if they do have a period of unemployment within their five years, their rent is protected and the rent is more affordable, it’s a lower rent.
“We also set the purchase price now, which means that they're protected from any inflation in the housing market. That means they know what they're going to pay in five years' time and it's not going to go up with inflation or rises in the market.”
Guaranteeing the price of the property at the beginning of the five-year tenancy allows people to have a goal to work towards, without fear that it may become more expensive over time, MacRae said.
He added: “That’s a massive piece of comfort for most folks, it doesn’t matter what the market does, they know that’s the price you’re going to pay.”
The charity boss said there is scope for the scheme to be rolled out to other areas, and that the Scottish Government has said it’s a scheme that they like because “it doesn’t cost them a lot”.
“They give us a loan and we pay them interest on the loan, so it’s not a high subsidy model.”
MacRae said he was irked that Ross and the Tories pointed to Wales and the scheme operating there, whilst missing the point that there was one already operating in Scotland.
McRae said: “I’m quite optimistic for the rural areas, I just think we need to get past this thing about England and Wales are better, they’re not. I think there’s a lot happening here that’s really good.”
The Scottish Tories did not respond to our request for comment.
