To ask the Secretary of State for Housing, Communities and Local Government, whether homes built under the £12 billionn Affordable Homes Programme that are made available as shared ownership properties will be required to be sold with a commitment to build a replacement affordable house of the same size.
18 May 2020
Affordable housing grant allocated using government subsidy is recovered or recycled through the Recycled Capital Grant Fund (RGCF) to be spent on new affordable housing, if there is a disposal of the grant funded property or if the use of grant funded property is changed. RCGF rules apply to shared ownership homes when a provider receives staircasing sales receipts - when a shared owner increases their share or purchases their home outright. Providers have three years from the date of the receipt to invest in replacement properties. If they are unable to reinvest the funds during the three years they are required to return the funds to Homes England or the Greater London Authority.
Any profits from the sale, for example as a result of house price increases, are retained by the Housing Association. Typically profits (“surpluses”) can be recycled into investment into new affordable housing, or to other support Housing Association services (such as spend on community projects) as bound by their articles of association.