What impact does being in a DPA have on your development?
You've probably heard of it before – a Designated Protected Area ('DPA'). But what exactly is it and what purpose does it have?
DPA regulations were introduced to ensure any grant funded shared ownership properties in areas designated by the Secretary of State remain as affordable housing to ensure sustainability of shared ownership housing stock in hard to replace areas. The areas are set out in the Schedule of The Housing (Rights to Enfranchise) (DPA) (England) Order 2009 and are listed either by entire parishes or designated by maps.
What impact does being in a Designated Protected Area have on your development?
If it transpires that the development site is situated in a DPA, Homes England requires registered providers to include a provision in the shared ownership lease to either:
- restrict the ability for the owner to buy further shares in their property to own a greater proportion of their home (known as staircasing) to a maximum of 80%; or
- oblige the registered provider to repurchase the property, at market value, when the owner wishes to sell.
Whilst this requirement attempts to ensure that there remains an adequate level of social housing in protected areas, it may have an effect on the saleability of the home as well as the possibility of securing lending for prospective purchasers.
Is there any way around this?
There are not many ways to circumvent this regulation, but one option for registered providers is to seek to obtain a waiver from Homes England. Under certain conditions, Homes England can waive the condition related to DPA status, allowing buyers to staircase to 100% without an obligation on the registered provider to buy back the property.
The registered provider are not able to make this request themselves, it must be through and with the support of the relevant Local Authority. If the Local Authority considers that there are sufficient reasons why the shared ownership stock does not need to be protected in perpetuity, they can request from Homes England, on behalf of the registered provider, the DPA status be removed as a condition.
EMW have particular expertise in social housing and in acting for housing associations. If you have any queries as to whether your development would be affected and your options going forward, please get in touch with Lucy Jones a senior associate in our Social Housing team or give us a call on 0345 070 6000.
Alternatively, click here to find out what our Social Housing team can help you with.
This article was prepared by Batuhan Bikim.