Discounted Housing

What is ‘Discounted Housing’?

When a builder applies for planning permission for a private housing site with over fifteen new homes, we can ask that a number of those properties are sold at a reduced or ‘discounted’ price as part of the planning permission.

These homes are then offered to people who can prove that they can’t afford to buy the property at the full price but can afford the discounted price. This discount will be attached as a condition on the deeds of the house. When the house is resold, it must once again be sold at the same percentage reduction of the new market value.

Our 'Discounted Housing' factsheet summarises all of the information contained on this page in an easy to read format.

Who can buy a discounted home?

People affected by demolition proposals in regeneration areas are given first choice. You will already be aware if you are affected by demolition plans, and we will contact you when a site becomes available.

Where there is not much interest in a particular scheme from these residents, the discounted properties will be made available to any person who may be interested. However, if you were interested in a particular house, you must be able to show us that you can’t afford the full market value, but that you can afford the reduced value.

Is the quality of a discounted property different to the others on the same site?

No. Just because a property has been discounted, this does not mean that the design or quality is any different to the full price houses.

Who 'owns' the amount that has been discounted?

Nobody.

You would own the discounted property the same way as any other owner/occupier. The discounted homes scheme is there to help people who are struggling with the current high property prices. When the property is sold, the percentage discount will simply be passed to the new owner

I think I am eligible to buy a ‘discounted home’. Is there anything that I need to consider before proceeding?

Firstly, there is absolutely no reason why you could not complete one of our application forms if you are interested in a specific property.

However, there are certain things that you will need to consider:

  • We will need a ‘mortgage in principle’ offer from a bank or building society, to show us how much they will lend you. Where the mortgage offer (plus any savings) is less than the discounted price of the property you are interested in, or is more than the full market value, you would not be able to buy the property.
  • You will not be able to buy a discounted home for renting out (i.e. buy to let)
  • We will have to assess your personal finances.  Any debts, County Court Judgements etc. would have to be considered on an individual basis.
  • Remember you will usually be expected to pay a deposit when you exchange contracts to buy the property.  If your existing house is being demolished as part of the regeneration plans, the Council will be able to help with this and some of the other costs involved.

If a few people are interested in a property, how do you decide who gets it?

Your application will be assessed, and points will be allocated according to your current housing situation.

Can I sell the property at full market value in the future?

No.

If you were to buy a discounted property, you would have to sell with the same percentage discount off the new market value. A condition would be attached to the deeds of the property to ensure that this happens.

You would have to give us up to three valuations by RICS qualified surveyors. We would then have to agree upon the value. When a valuation is agreed, we would try to find a buyer who meets the requirements of the scheme within 16 weeks. If the Council cannot find a buyer, you will be able to sell the property on the open market so long as it is offered with the same percentage discount.

This all sounds a bit too good to be true. What’s the catch?

There are no catches. Although you would never be able to sell the property at full market value, you would still make a financial gain on your property if house prices rise.

Which properties are available at the moment?

There are currently no discounted homes available for sale at the moment. The only ones that are now likely to be available are properties that come up for 'resale', as the discounted housing scheme is being phased out.

Who do I contact for further information?

If you are affected by the demolition proposals in any of the Regeneration areas, please contact your local Community Housing Office:

Derker Team

Flint Street, Derker – 0161-652 8873

Werneth/Freehold Team

80 Tamworth Street, Werneth – 0161-770 4246

Alternatively, please feel free to contact us here at the Regeneration Directorate

Tel: 0161-770 4232          Fax: 0161-770 4410

Email: housing.implementation@oldham.gov.uk