Legal & General understood to be interested in acquiring the homes

Peabody is selling around 500 homes that it provided under an “old product”, the Do-It-Yourself Shared Ownership (DIYSO) scheme, to free up capital and concentrate on its core business.

A Peabody spokesperson told Housing Today that the DIY shared ownership homes are far from the housing association’s core activity of providing social homes and that it is trying to be careful with spending.

Housing Today understands that Legal & General is looking to acquire the 500 DIY shared ownership homes located across a few dozen local authorities in London and the South-east, but that nothing has been agreed yet.

Peabody has said that the sale will take place sometime in 2024, but the exact timescale is uncertain.

DIY shared ownership was a part-buy, part-rent scheme available in the 1990s that enabled buyers to buy any property on the open market, not just new builds.

The scheme, which the government scrapped, involved the housing provider purchasing an existing home and selling a share to the buyer.

In 2009, DIYSO was replaced by HomeBuy Direct, a scheme whereby the government and a housing developer jointly funded an equity loan of 30% of the valuation, allowing the purchaser to only pay a mortgage on 70% of the home’s value.

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A spokesperson for Peabody said: “We’re currently consulting on a proposal to transfer a number of shared equity properties that were originally bought through the government’s now discontinued Do It Yourself Shared Ownership scheme. We would reinvest the income in more social homes and repairs, maintenance and community services for our residents.

“For the shared ownership leaseholders, this would simply mean another registered provider with expertise in managing similar properties taking on our interest in their lease. The residents won’t need to do anything, and the terms of their lease, their rights and their protections will stay the same.

“Once we have considered all the consultation responses, our Board will make a final decision.”

An L&G spokesperson said: “Legal & General Affordable Homes is unable to comment on any speculation regarding the acquiring of homes in conjunction with Peabody Housing Association. As a long-term responsible investor, Legal & General Affordable Homes invests long-term capital into sectors where there has been a shortage of investment and innovation, focusing on growth opportunities for communities.