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Forms of assistance

This content applies to England & Wales

Forms of assistance that a local authority may provide .

Overview

The provisions of the order give local authorities a wide discretion as to the form of assistance that they can provide with housing renewal costs.[1] This may be in the form of:

  • grants
  • loans
  • assistance from home improvement agencies
  • supporting purchase and relocation
  • other forms of assistance.

Local authority assistance may be subject to certain conditions,[2] for example, the requirement to repay a grant if the property is sold within five years. However, before imposing any such condition or taking steps to enforce it, a local housing authority must consider the ability of the person concerned to make that repayment or contribution.[3]

Conversely, an authority may decide to give assistance without attaching any conditions.

Grants

Although assistance will usually be provided in the form of a loan, it is still possible for local authorities to make grants in certain circumstances where it is considered that they represent the most appropriate form of assistance. This is most likely to be the case for minor items of work, where the costs of arranging loan finance cannot be justified or in cases where the financial circumstances of the applicant are such that any other form of financial assistance would be inappropriate.

A local authority can make a grant for any of the purposes listed on the Housing renewal assistance system page (in section on scope of housing renewal system). The local authority's policy should set out the criteria that a client must meet in order to qualify for a grant.

A local authority may carry out a means test of a person's financial resources in deciding whether or not s/he qualifies for a grant, and how much assistance s/he qualifies for. Each local authority is entitled to decide the rules of the means test itself, but they must be set out in its policy.

Flood support grants

Home owners whose properties were damaged in part or in full by the floods of winter 2013 – 2014 can apply to their local authority for a repair and renewal grant of up to £5,000 for the purpose of improving the future flood resilience of their property.

Loans

A local authority may consider offering financial assistance other than grants, in a form that may require the applicant to make some financial contribution or repayment. The loan can be for any of the purposes specified on the housing renewal assistance system page (in section on scope of housing renewal system). The local authority must set out, in its policy, the criteria that an applicant must meet in order to qualify for a loan.

Before making a loan, a local authority will consider the applicant's ability to make a contribution or repayment. If s/he is not in such a position then the local authority would have to assist her/him by some other means, such as a grant. A local authority may take any form of security in respect of the loan.[4]

Where the local authority decides to take security on the loan, this could include putting a charge on the applicant's home. If s/he subsequently defaults on repayments, the local authority could take action for possession of the property. It is also possible for the local authority to reduce the scope of, or remove, the security over the property.[5]

The main types of loan that could be made available are:

  • interest-bearing repayment loans
  • interest-only loans
  • zero-interest or equity release loans.

Interest-bearing repayment loans

The recipient would be required to repay this type of loan over a specified period of time, and the local authority will apply an interest charge on the loan. It is up to the local authority to decide whether or not to take security for an interest-bearing loan.

Interest-only loans

For this type of loan, the local authority uses the recipient's house as security on the loan, and s/he would repay interest on the amount that s/he had borrowed. The recipient will repay the capital when s/he sells the property on which the loan was secured.

Zero-interest or equity-release loans

The recipient would not be required to pay any interest on this type of loan, for which the local authority would use her/his house as security. The recipient would repay the loan when s/he sells the property.

It is also possible for the local authority and the recipient to agree that the authority would take a share in any increase in the value of the recipient's house, if this happens between the date on which the loan is made and the sale of the recipient's house.

Third-party loans

A local authority may work with third parties to provide a loan. It may provide assistance indirectly, for instance by entering into an agreement with a third party for it to make the loan to the recipient. Alternatively, the local authority may guarantee that a mortgage lender that is lending money to the recipient for purchasing, constructing or improving a home will not bear the cost if the recipient defaults on the loan.

Assistance from home improvement agencies

A local authority may work with, or refer an applicant to, a home improvement agency to assist her/him with any of the issues listed on the housing renewal assistance system page (in section on scope of housing renewal system). Home improvement agencies are non-profit making organisations run by local authorities, housing associations and charities. Their objective is to assist people to live independently at home by, for example:

  • arranging for repairs to be carried out
  • assisting people in getting money for repairs
  • running handyperson and energy efficiency schemes.

There are co-ordinating organisations, Foundations (in England) and Care and Repair Cymru (in Wales), which can assist a client in contacting a local home improvement agency.

Supporting purchase and relocation

A local authority may assist someone who wants to buy another more suitable property, either in the same or another area. The authority can offer different types of assistance, for example a loan or a grant, to enable the person to do this.

However, the local authority can only help a person to purchase another property if:

  • it is satisfied that buying the accommodation would give that person a similar benefit to carrying out work on her/his existing accommodation or
  • it has bought, or proposes to buy, her/his existing accommodation, whether by compulsory purchase or otherwise.[6]

Other forms of assistance

There are other forms of assistance that a local authority may provide, in addition to loans and grants. For example, the local authority may:

  • offer cut-price materials for carrying out works
  • supply manual labour for works to be carried out
  • make it easier for the person to have access to a tool hire scheme
  • provide a list of approved builders who will supervise or carry out the work
  • offer to accommodate the person temporarily while the works are carried out, and this may include paying for the removal and/or storage of her/his possessions.

[1] article 3(3) Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 SI 2002/1860.

[2] article 3(4) Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 SI 2002/1860.

[3] article 3(4) Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 SI 2002/1860.

[4] article 3(6) Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 SI 2002/1860.

[5] article 3(7) Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 SI 2002/1860.

[6] article 3(2) Regulatory Reform (Housing Assistance) (England and Wales) Order 2002 SI 2002/1860.

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