Feb 5 2009 By Garry Thomas
GLASGOW Housing Association (GHA) is looking at ways it can further help its factored homeowners through the credit crunch.
The association is to seek clearance from HM Revenue and Customs (HMRC) on introducing more flexible payment plans for homeowners at risk of facing court action because they are having difficulty paying their share of bills for major home improvement works such as re-roofing and overcladding.
The move comes following a review of GHA's Debt Recovery Strategy for home owners and could help extend repayment periods for up to two years for owners who are willing to pay their bills but are struggling to meet the current 12-month payment period.
If introduced, it means that GHA can become more flexible in considering payment options on a case-by-case discretionary basis for those owners participating in their capital investment and improvement programme.
GHA is now to seek input from HMRC to ensure any increased flexibility would not expose GHA and its tenants to tax liabilities.
GHA plans to spend a further £20 million in the coming financial year (2009/10) on modernising and improving owners' homes.
The investment works not only increase the re-sale value of owners' properties but also improve their energy efficiency, helping reduce owners' fuel bills.
All GHA-factored homeowners who live in a common property alongside GHA tenants have access to a preferential grant scheme - not available anywhere else in Scotland - under which they receive grant assistance of between 50 per cent and 100 per cent of their share of the costs of these improvement works.
To date, almost 7,000 owners have received over £51 million in grants to help offset their share of the £70 million worth of capital works carried out on their homes.
Sandra Forsythe, GHA Tenant Chair said: "We recognise that even with the grant assistance available to them, some owners are finding it difficult to pay their share of the cost of improvement works within 12 months.
"With the impact of the,'credit crunch' and increased fuel bills more owners may struggle to cope."
She added: "The latest proposal approved by the GHA Board would offer an extra lifeline by allowing us to apply discretion on a case-by case basis to assist those owners who are at risk of facing court action and genuinely need help, whilst ensuring that GHA tenants' rent payments are not used to subsidise the cost of improvements to owners' properties."
Sean Clerkin, chairman for the Glasgow Home owners Campaign (GHC), said: "We welcome this major step forward.
"This is a clear victory for the GHC in that it gives a payment extension to homeowners, up to a maximum of two years to pay back.
"It should encourage homeowners to contact the GHA."
In addition to the preferential grant scheme, owners factored by GHA also have access to a Financial Assistance Scheme, operated by Glasgow City Council on behalf of the Scottish Government, this offers financial advice to homeowners struggling to pay their share of the cost of improvement works and can help facilitate loan facilities from organisations such as Glasgow Credit Union.
The recent review of GHA's Debt Recovery Strategy for homeowners found that despite the considerable assistance available, some homeowners with limited income or in difficult financial circumstances are still at risk of facing court action because they are not able to pay their bills within one year.
Existing GHA policy already enables homeowners to agree repayment plans with the association.
The more flexible approach now proposed would allow GHA to take more account of owners' individual circumstances and their ability to pay, as well as the impact owners repayment plans would have on GHA tenants' rent payments.