The information requested is being compiled and will be forwarded to the Deputy in accordance with Standing Orders.
The following deferred reply was received under Standing Order 51.
Under the Local Authority Affordable Purchase Scheme (LAAPS), affordable homes are made available by local authorities, with the focus on new-build homes in order to increase supply in those areas where affordable homes are needed most. This involves the provision of new homes at an affordable price involving a significant discount of between 5%-40% on the market value of the property. In return for the discount given to the purchaser, the local authority retains a commensurate equity share in the property. LAAPS is governed by the Affordable Housing Act 2021 and its associated Regulations (S.I. 20/2023, and S.I. 21/2023). Section 12(7)(f) of the Act provides for an affordable dwelling purchase arrangement to set the date after which the affordable dwelling equity may be realised by the housing authority if not previously redeemed in its entirety by the homeowner. This is known as the long stop date.
The Affordable Housing (No. 2) Regulations 2023 (S.I. No. 21 of 2023) prescribes the long stop date, with Regulation 6(5) setting the long stop date at 40 years.
Section 15 of the Affordable Housing Act 2021 sets out the three means by which the equity share may be redeemed by the homeowner and realised by the local authority, which are:
• Redemption payments by the homeowner at any time;
• Payment by the homeowner following a sale of the affordable home; or
• Realisation by the local authority following the occurrence of a realisation event in accordance with sections 18 and 19 of the Act.
Section 18 of the Act enables the local authority to seek to have the equity share redeemed in specific circumstances, termed a realisation event. Section 18(2) lists the circumstances that become realisation events. One of the realisation events include the long stop date.
Redemption or part redemption of the equity share remains a matter for the homeowner at their own discretion throughout the course of the affordable purchase agreement. The only exception would be where the homeowner acts in a manner which obliges the local authority to realise its equity share, for instance by abandoning the property or failing to comply with a notice from the local authority in relation to a material breach of a covenant in the affordable dwelling purchase arrangement.
Where redemption has not taken place by the date specified in the affordable purchase agreement, the Act gives the local authority the legal power to realise their share of the property. In the case of reaching the Long Stop Date, it is not automatic, and there is no obligation on the local authority to redeem the equity share. This will be at the discretion of the housing authority. It is envisaged that housing authorities would not, save in exceptional circumstances, opt to realise the equity during the lifetime of the purchasers but will instead wait for disposal of the dwelling on the purchaser's estate after death.
Additionally, Section 18(3) of the Affordable Housing Act 2021 provides for the housing authority to communicate with the homeowner for the purposes of advising, consulting or negotiating any realisation event. It further outlines that the occurrence of a realisation event shall not oblige the housing authority to serve a realisation notice.
