Home Improvement

Loans and grants to improve your home or property

Introduction

Although the government believes homeowners should be responsible for maintaining their own property, it accepts that some people particularly the elderly and the vulnerable do not have the money or resources to keep their homes in good repair.

Local councils therefore have an important role to play in providing help.

This summary provides a brief outline of the various loans and grants now available from The council under its Home Assistance Policy.

Aiming to help people

The Council wants to:

• Improve the condition of existing housing.
• Make better use of empty properties.
• Improve energy efficiency in homes.
• Regenerate local neighbourhoods.

Giving you a fair deal

The Council believes its loan packages should be affordable, attractive and easy to understand, and should not carry the threat of repossession.

There are two main loan packages on offer. The first involves equity share, where the Council benefits from any increase in property values but also shares the risk with the owner if house prices drop.

The second package involves low interest fixed rate loans that simply cover the interest lost by the Council on the money borrowed.

Both packages are explained in greater detail in this summary and are designed not to penalise the borrower.

Because there is only a limited budget for providing loans and grants, the council asks applicants to take part in a Test of Financial Resources ('means test') to ensure help is given to the most needy.

The Council operates a waiting list for potential applicants if the budget becomes over subscribed.

Different types of help available

1. Equity share loans

An equity share loan is most suited to older homeowners with substantial equity in their property, although it is available to anyone who has enough equity to cover the cost of the repair or improvement work needed. It is not available to tenants or landlords.

To be eligible, applicants must:

• have lived in and owned the property for at least three years.
• undertake a means test to show they are unable to fund the work themselves.
• provide a valid house insurance certificate in their name, showing realistic rebuilding costs.

In addition:

• the minimum loan is £1,000.
• Any valid professional fees (eg building regulation approval, structural engineers' report, electricians' report) can be included in the loan.

The equity share scheme involves the Council providing a loan for agreed repairs and improvements. The Council takes a percentage "share" in the value of the property when the loan is made, and receives the same percentage of the property value when the loan is settled. If the value of the property goes up, the Council makes a profit. If the value drops, the Council loses money. The homeowner can settle the loan whenever they choose, or when the property is next sold.

Example:

A property is valued at £100,000 and needs £10,000 worth of repairs. The council registers a 10% share (the equivalent of £10,000) in the value of the house.

Six years later, the house is sold for £150,000. The Council receives 10% of the sale value, which now equals £15,000. This allows the Council to make a profit on the loan without penalising the owner. This money will then be used to help another applicant.

2. Low interest fixed rate loans

Homeowners, including those who have little or no equity in their property, may be eligible for a low interest fixed rate loan to fund repairs.

To be eligible, applicants must:

• have lived in and owned the property for at least three years.
• undertake a means test to show they are unable to fund the work themselves.
• provide a valid house insurance certificate in their name, showing realistic rebuilding costs.

In addition:

• the minimum loan is £1,000.
• Any valid professional fees (eg building regulation approval, structural engineers' report, electricians' report) can be included in the loan.

Applicants can choose one of two ways to repay the loan:

a) Interest only, with the capital being repaid either when the applicant chooses or when the property is sold.

b) Capital and interest repaid over a fixed term. The term must be agreed at the start of the loan and determined by a combination of the amount borrowed and the applicant's ability to pay.

The Interest Rate will be set at bank base rate at the time the loan is taken out.

3. Grants

There are four main types of grant assistance:

• Spot the difference grants a maximum of £100 is available to householders across the district for insulation works. These grants are not means tested. 
• Renewables Grant – a maximum of £100 is available for householders who wish to install renewable energy measures – for instance wind turbine, solar panel and ground source heat pump.
• Disabled Facilities Grants –grants which can provide facilities which make a person with disabilities more mobile or comfortable within their own home.
• Renovation Grant – Only available in the Royals Renewal Area (by Chester Station, off City Road)

Who are eligible for Renovation Grants?

The only applicants eligible for Renovation Grants are homeowners living in the Royals Renewal Area.

Applicants must also:

• undertake a means test to show they are unable to fund the work themselves.
• provide a valid house insurance certificate in their name, showing realistic rebuilding costs.

In addition:

• the minimum grant is £1,000
• Any valid professional fees (eg building regulation approval, structural engineers' report, electricians' report) can be included in the grant.

The maximum grant is £25,000. Should works exceed this amount then an applicant may be eligible for an equity share loan or a low interest fixed rate loan to make up the difference.

The Council aims to process applications within six months. The offer of a grant would be dependent on availability of funds and on whether there is a waiting list.

4. Assistance to landlords

Landlords can apply for low interest fixed rate loans fixed at bank base rate at the time of the loan being taken out. Eligibility depends on the location and condition of the property.
The repayment period is flexible to meet the needs and wishes of the applicant and the size of the loan.

• Landlords with eligible properties outside Renewal Areas can apply for a loan to cover up to 50% of the cost of the work
• Landlords of eligible properties inside Renewal Areas can apply for a loan to cover up to 75% of the cost of the work.
• Owners with properties that have been empty for over two years and who want to 'improve to let' (including Living Over The Shop schemes) can apply for a loan to cover up to 50%

5. Other forms of assistance

Home owners requiring works costing up to £1,000 may wish to join the Chester District Wide Credit Union whereby the amount they can borrow is directly related to the amount they can regularly save.

6. Disabled facilities grants

Adaptations to homes for people with disabilities continue to be funded under the Disabled Facilities Grant (DFG) scheme. However the maximum grant allowed by legislation is £30,000.
In cases where the cost of work exceeds £30,000 homeowners can apply for either an equity share loan or a low interest fixed rate loan to bridge the gap.

In cases where the applicant has little or no equity in the property and is unable to repay a loan, consideration may be given to offering grant assistance to carry out the works or, if it's more cost-effective for the Council, enabling them to move to suitable alternative accommodation.

If you are an older or disabled home owner or tenant

Anchor Staying Put will help people like yourself to make the necessary repairs or adaptations to help you stay in your home in a healthy, safe and comfortable environment.

Any fee charged can be included in the Home Assistance you receive from the Council.

Further details of this service, which is supported by the council, can be obtained by telephoning 01244 677940.

Want to know more?

To find out more about the help on offer, contact the council's Private Sector Housing team 01244 402181 / 402189 / 402226

Full copies of the Housing Assistance Policy are also available on request.

Equity Share Loan Advice Leaflet (343kb) 

Don't fall into the right category?

If you fall outside current policy but feel you should be eligible for home assistance, you can still ask the Council to consider your position by writing to:

Chief Housing Officer
The Council
The Forum
Chester
CH1 2HS
Email: housing@chester.gov.uk

Downloads

• Preliminary enquiry form (22.7 kb)