3  KWL Products & Property Eligibility 

3.1 General

3.1.1 The principles of these three schemes as they apply to Key Workers can be found in the relevant chapters within this Guide except in relation to Intermediate Rent which is contained below.

3.2 Open Market HomeBuy

3.2.1 Qualifying key workers can access funding through two products; 1. MyChoiceHomeBuy and 2. Ownhome. For further information on both these products please see the OMHB chapter of the Capital Funding Guide.

3.2.1a Key Workers and Discounts on property
Where a home is offered at a discount by a public sector landlord, accepted as supporting the KWL programme, this would be deemed as an eligible property for Open Market HomeBuy

3.2.2 Portability

The same portability rights are available under OMHB as to those in receipt of a Grant under the Starter Home Initiative (SHI). 

What is “portability? Follow the asterisk.  

 

 

3.2.3 Recovering the Equity Loan

Please refer to OMHB.

The HomeBuy Agent should write to the beneficiary and set out the next steps as soon as it is aware that the KW wishes to sell their home.

  
3.3 New Build HomeBuy

3.3.1 For general guidance relating to New Build HomeBuy please refer to the NBHB chapter. This section of the guide, including the general section above, sets out additional requirements applicable to KWL schemes. 

3.3.2 The following products based on the New Build HomeBuy framework are NOT available through KWL: 

1. Rural repurchase/restricted staircasing
2. Do-it-yourself Shared Ownership (DIYSO)
3. Leasehold Schemes for the Elderly
4. Self Build

3.3.3  Key workers who are owner occupiers, including existing shared owners can access the scheme but are required to sell their existing property or interest in their existing property at the same time as participating through KWL New Build HomeBuy.

3.3.4 Property Eligibility for KWL New Build HomeBuy, refer to EOMHB section 3

3.3.5 Mobility, for Mobility details see NBHB 5.7.13

NB – Mobility applies to NBHB; for EOMHB, para  3.2.2 above may apply.

3.3.6 Leases

The Agency has published sample New Build HomeBuy leases for both flats and houses. For sample leases refer here 

3.3.7 RSLs are not obliged to adopt the Agency's sample lease but must ensure that the lease that they use contains the Fundamental Clauses, and complies with the Requirements of the CFG.

3.3.8 Nominations

See NBHB 5.7.12.

3.3.9 Cascade Principles for KWL 04/06 New Build HomeBuy

Cascade Principles apply for KWL schemes funded in 2004/06 where RSLs experience voids as a result of slow take up of units. Cascading is only available on condition that :

1. Developing RSLs marketed the scheme prior to handover
2. HomeBuy Agents assisted with headline marketing

For Guidance click on the asterisk.  

 

3.3.10  RSLs should provide the Agency with evidence of the marketing activity that has taken place, an evaluation of why the units are not attracting eligible key workers based on local housing market intelligence, and an analysis of the demand from any other groups for the units.

3.3.11  When the sale or renting of the scheme in accordance with the Key Worker Living programme Grant Requirements conflicts with the requirements of the local planning authority (as expressed in planning conditions or a section 106 Agreement), the RSL must bring this conflict to the attention of the regional investment team as soon as possible.

3.3.12 Cascade Options

Where:

1. units have been void for more than three months or
2. the Agency and/or the RSL identifies that units will be unlikely to sell/let within three months due to local market conditions

the Agency will  then work with the RSL to identify options to deal with the units based on the evidence provided.

3.3.13 Decisions can either be made on a scheme by scheme basis or to cover a group of schemes in a location dependent on local market conditions.

3.3.14 RSLs must not implement options without formal Agency approval. What sort of options? Follow asterisk for details.  

 

 

 

3.4 Intermediate Rent

3.4.1 The Intermediate Rent scheme is designed to assist in the recruitment and the retention of frontline key workers by making homes available for rent. This is particularly relevant for staff in the health, education and community safety sectors, whose services are essential to local communities but who are unable or do not wish to purchase a home. The intention is to target key workers who cannot afford market rents in areas within a reasonable travelling to work distance of their workplace.

3.4.2 See para 2.2.6 above  for specific eligibility requirements

3.4.3 Rents

The rent re-structuring framework does not apply to KWL Intermediate Rent.

3.4.4  The rent of homes available for KWL Intermediate Rent must not exceed 80% of the current local market rent. Wherever possible a figure significantly lower than this but higher than social rents should be anticipated.  Annual rent increases must be limited to RPI plus 0.5%.

For Guidance on rent in advance, service charges and damage deposits follow the asterisk.   

 

3.4.5 Tenancy Agreement

RSLs must grant Assured Shorthold Tenancies (AST).  Contractual periodic tenancies must be granted in all cases.  In no circumstances should ‘permanent’ Assured Tenancies be granted.

3.4.6 For Guidance on important clauses that should be used in the tenancy agreement, follow the asterisk.  

 

3.4.7 Single/Joint Tenancy

Where the property is let to joint tenants the Assured Shorthold tenancy will be granted to both parties who both need to be fully aware of the terms.  It should be made clear in the conditions attached to any joint tenancy that at least one party must remain in eligible key worker employment.  Both the key-worker tenant and the non-key-worker tenant are placed under an obligation to inform the landlord RSL in the event that the key worker tenant ceases to be a key worker.

3.4.8 Change of Employment notification

Under the terms of the tenancy agreement the Key worker is required to notify the landlord within seven days of leaving their current qualifying employment.
 
The landlord will need to decide which of the following draft clauses they wish to use in their tenancy agreements:

• Option A “  to notify the Landlord  within 7 days of the tenant  leaving his or her current employment (whether or not such change would lead to the tenant ceasing to qualify as a Key Worker)
   or
• Option B “  to notify the Landlord  within 7 days of any one of the tenants  leaving his or her current employment (whether or not such change would lead to the tenant ceasing to qualify as a Key Worker)

3.4.9 Cessation as Qualifying Key Worker

It must be a condition of the Assured Shorthold tenancy agreement that when a key worker leaves a qualifying form of employment the tenancy must be terminated and the property surrendered. In addition the market rent will be charged from the next rental payment period until such time as the property is vacated, when it should be re-let to another key worker. Changes in the sector specific eligibility criteria will not, on their own, trigger a requirement to surrender the property. Eligibility status will be judged against the criteria prevailing at the time they were granted assistance under the scheme .unless they change employment or wish to transfer to another property or participate in one of the other KWL options, in which case, their eligibility will be re-assessed against the current version of the sector specific eligibility criteria.   

3.4.10  Exclusions
 
See sub section 2.4 above.

3.4.11 Recovering the Property

The provisions take effect from the date that the tenant leaves eligible employment.  Thus, the landlord will be expected to take action to recover the property at the earliest opportunity. Failure to do so will be treated as a change of use for grant recovery purposes.

3.4.12 The market rent is payable from the next payment period until such time as the property is vacated.

3.4.13 If the tenant returns to eligible employment before the possession order comes into force the property recovery provisions no longer apply. 

3.4.14 RSLs must make contact with the tenant and set out the next steps as soon as they become aware that the tenant is no longer a qualifying key worker. 

3.4.15 RSLs must use all reasonable endeavours to recover debts.  As landlord RSLs will initiate legal action to recover possession of the property, but the tenant needs to be informed of the landlord’s intention to recover the cost of any legal action from them.

3.4.16 RSLs are expected to provide housing advice to people who have lost their qualifying form of employment and consequently have breached the tenancy, referring them to appropriate agencies such as the Local Authority. 

3.4.17 RSLs must be mindful about the status of those who are on work permits, as the rules may prevent them from having recourse to public funds via access to public sector housing.

3.4.18 Where a Key worker dies in service, RSLs will be expected to manage such cases so as to avoid unnecessary hardship for any household members remaining in the property.

3.4.19 Recovered property should be re-let to another keyworker as soon as possible and RSLs will be expected to have robust procedures to ensure against unnecessary void periods.  Where having exhausted possibilities of re-letting to another key worker, RSLs may consider the cascade principles