I became a consultant in 2004, it seems so long ago now and yet has flown by. One of the reasons I think arc⁴ has been so successful is because we move with the times; providing intelligence to inform current policy thinking and helping clients to create new opportunities. Times change, priorities change, and ideas and solutions change. What seems like a great idea (or maybe not so great) one week, has been lost in the next Autumn statement, budget or round of funding.
However, one of the solutions that arc4 has advised on since our inception has been equity loans. They may have got a dreadful press in some locations and Richard Hillman certainly didn’t help that image in Coronation Street when he conned a number of the Street’s residents with ‘fake promises’ and worse, but the reality is that equity loans may just have worked a treat for some of the residents in Coronation Street.
Equity loans first kicked into housing when the Regulatory Reform Order (RRO) 2002 enabled local authorities to lend money rather than provide grants. Instead of renewal grants, we saw loans kick in and the role for loans increased again in regeneration projects where demolition was undertaken. Equity loans bridged the gap between the value of the current home and a new/replacement home. During the Housing Market Renewal days, arc⁴ advised 7 of the 9 Housing Market Renewal Partnerships on developing equity loans and a fair number of New Deal for Communities projects.
Equity loans were straightforward, popular and easy to understand. They really came into their own when Help to Buy was launched and now supports many first-time buyers to achieve home ownership and many developers to sell homes.
However, their role and flexibility are now taking them into all sort of areas of work that are high on the agenda of local authorities and registered providers. Equity loans are being considered as a way to pay for long term care to help older people remain living in their home longer, energy efficiency measures, helping older households to ‘rightsize’ and improving the quality of the private rented sector. They are genuinely worth a look at as a solution to deliver the right outcomes for people, and better value for money where there are tightening budgets.
However, they don’t work for everyone and are not the best option for everyone. It is really important to ensure the correct financial advice is given which is why specialist support is often required; but if arc4 was giving advice, then Ken Barlow could live on Coronation Street for many more years and pay for any care needs he may require through an equity loan and Wetherfield Council could reinvest the funding paid for now, again and again on future households, if an equity loan was used…….. A win-win outcome or at least one worthy of further investigation.