A downsizing scheme in Devon benefits social housing tenants and makes good financial sense, reports Brian Wilson.

A downsizing scheme in Devon benefits social housing tenants as well as making good financial sense, reports Brian Wilson.

The Department for Communities & Local Government recently announced its backing for a pilot project called Freespace in the decidedly un-rural London Borough of Redbridge. Under this pilot the Borough will help any elderly homeowner who wishes to downsize, by finding them smaller rented accommodation to move in to and by renting out their owned home to generate an income.

Go west (or south-west) and you will find a rather different downsizing initiative – the Tenants Incentive Scheme – which has been in operation since March 2010 thanks to Rural Services Network member, South Hams District Council.

South Hams is typical of rural local authorities, with a backlog on its housing waiting list and house prices well beyond the reach of many local people. At an average £323,000 house prices are the highest in Devon. It recognises that some of the social housing stock is under-occupied where, for example, children have grown up and moved out, leaving couples or individuals in family-sized homes.

Another key issue is that almost a tenth of the district's housing is classified as a second home, but the Council has managed to turn this partly to its advantage. When Government rules on the second homes Council Tax discount were relaxed, South Hams reduced its discount from 50% to just 10% – the minimum possible under current legislation. The money raised from this has been used to put £35,000 into an initial funding pot for the Tenants Incentive Scheme.

The South Hams scheme applies only to social housing tenants. In particular, those in property owned by Tor Homes, which is the biggest provider and which manages the former council housing stock. Similar incentives are offered to tenants with the other nine housing associations operating in the area. Nearly all scheme participants so far have been of retirement age, though in principle any under-occupying tenant can apply.

The tenant's move must be into a home with at least one less bedroom. Tenants wishing to downsize are offered a cash incentive, which consists of a fixed sum of £1,000 plus £500 for every bedroom that is released. Hence someone moving from a three bedroom house to a one bedroom bungalow would receive £2,000. That is, the flat sum plus a further £1,000 for accepting somewhere with two fewer bedrooms. This incentive is seen as contributing to the costs any tenant is likely to incur when moving.

The district council has found that tenants generally still want somewhere with two bedrooms. Retaining one spare room is popular. Nonetheless, as Cassandra Harrison, the Affordable Housing Enabling Officer, says: "We get a family sized property back and someone can move off the housing register."

Housing Association records are used to identify households which might be approached about the scheme. Where appropriate, they will receive a letter to make them aware of the scheme and to tell them about smaller properties that are available. However, the Council emphasises that these are households in assured tenancies and no-one is forced to move.

Initially the scheme was tried in Ivybridge, just to the south of Dartmoor, where three tenants of Tor Homes were helped to downsize, freeing up some three bedroomed family homes for re-letting. After this experience the scheme was made available across the district area.

So far the scheme has enabled fifteen moves into smaller homes at a cost of £26,000. This is considered very good value for money by the Council, especially if compared with the cost of building new housing.

The scheme is seen as particularly attractive to older households who wish to move somewhere that is easier to maintain and cheaper to heat. Indeed, several moves have now been into new build properties that were built to Sustainable Homes Level 4 standards. Residents have remarked how much cheaper their electricity and gas bills have become.

South Hams how hopes that more households will take advantage of the scheme later in 2012 when some new social housing units are due to be completed in Totnes. What happens in Redbridge will no doubt be fascinating, what's already happened in South Hams is a proven model.

This article was written by Brian Wilson whose consultancy, Brian Wilson Associates, can be contacted at brian@brianwilsonassociates.co.uk. Brian also acts as RSN Research Director.