Financing Co-operative Housing

A timely loan from Co-operative & Community Finance has helped to secure the future of the most southerly and westerly housing co-operative in England. On 29 September 2016 Spiral Collective Housing Co-operative became the owner of the Cottage and associated land and buildings on the picturesque Pendennis Headland in Falmouth, Cornwall.

Spiral Collective had occupied the Cottage for 13 years on a short-term tenancy agreement. In 2003 a group of community activists in need of housing and workspace moved into the derelict premises owned by South West Water. Following discussions with the eviction team they were allowed to stay and granted permission to restore the buildings.

The property comprises a large 6-bedroom brick house, two detached workshops and a large garden with vegetable plot and open space. It is currently home to nine single adults aged between 21 and 49 whose various occupations include flag maker, gardener, writer and seaweed harvester. They all pay rent to the co-operative.

Tim van Berkel, who moved in two years ago, said: “Over the years many people have come and gone. They tend to stay for two to four years. There is one original resident here. One resident is pregnant and that’s a very positive sign for the future.”

In 2015 following a change of personnel and policy South West Water decided to sell the property and sought to evict Spiral Collective. “We thought that was going to be the end,” said Tim. “But with the help of Co-operative & Community Finance, Radical Routes and Triodos Bank and a very generous individual we managed to negotiate and complete the purchase of the property.”

In recent years the Cottage has become established as a small community hub. It hosts live music events in the garden and the workshops and large yard have been used by several start-up businesses. Having secured the long-term future of the property, Spiral Collective intends to increase and improve its links with the local community.

Ian Rothwell, Investment Manager at Co-operative & Community Finance said: “We had to move quickly to secure the future of the Cottage and I’m very glad we did.

“Spiral is a housing co-op that uses the model rules developed by Radical Routes, and that is how they came to hear about us. I think there is a good synergy between Radical Routes and Co-operative & Community Finance. Both organisations have a total commitment to helping people take control – whether it is their living space or their work place. And both organisations insist on genuine mutuality and co-operation.”

Members of a North West housing co-op have purchased their home after receiving a loan from us. Now they want to help others do the same.

The four members of Castle Rockdove Housing Co-op have been living together for a number of years but formally set up as a co-operative two years ago, after being spurred into action by the news that their landlord wanted to sell. They recently drew a loan from Co-operative & Community Finance to help buy their flat in Rockdove Avenue, an estate of 245 flats in Hulme, Manchester which was built as council housing in 1948.

The four flatmates are also members of other co-ops – Carbon Co-op, Glebeland City Growers and Manchester Radical Social Centre – and say that living and working co-operatively allows them more time, energy and freedom to spend on projects which will benefit their community.

Matt Fawcett, who has lived in the flat for 10 years, said: “You find that when people are free from the tyranny and stress of paying extortionate rent prices, they have time to think creatively about implementing social change. We need to stem the tide of privatisation so that people can stay in their homes and feel secure.”

Since becoming owners, the co-op members are making changes which will make the property more sustainable, energy efficient and eco-friendly. Having successfully purchased their own flat, the co-op is looking to help others in their area do the same thing, and has been approached by other renters in their building for advice and guidance on the process. They acknowledge that it isn’t always easy, though:

“Banks are generally not interested in lending to people like us; people who earn below market rates and who want to borrow a relatively small amount. It’s really difficult to find a mortgage lender as a co-op, but Co-operative & Community Finance came to the rescue! They talked to us and they really understand our project.”

Ian Rothwell said: “The four members are part of the co-op sector in this part of Manchester, and are committed to and enthusiastic about co-operative living and working. Although they are all employed, none of them are earn high salaries and setting up the co-op is an ideal way of ensuring affordable accommodation.”

The members of Castle Rockdove are currently discussing expansion options and are looking for investments from £200, at much better interest rates than you’ll find at your local bank. If you’re interested in investing please get in touch with Matt Fawcett: matt@carbon.coop

Nearly forgotten Victorian home saved by co-op

A neglected Victorian home in Manchester has been bought by the Co-operative Living Freehold Society, with plans for a much-needed boost of environmental refurbishment. This is thanks to a loan from Co-operative & Community Finance who brokered a deal with other lenders.

The property is a semi-detached three-storey house in the Withington suburb of Manchester. It was discovered in a semi-derelict condition after several years of neglect from its former owner, requiring much needed maintenance work. The co-op plans to refurbish the property to a high level of environmental sustainability, making it attractive for housing co-ops to lease.

A potential housing co-operative tenant has already emerged, forming specifically with the intention of leasing the property from the freehold. Cordata Housing will have control over day-to-day matters, such as the distribution of rents, contribution to reserves and short-term regular maintenance activities.

Ian Rothwell, investment manager at Co-operative & Community Finance said “We feel very confident with the idea of The Co-operative Living Freehold Society having control over several properties. It means that housing co-operatives will get a retro fit eco property ready to move into, a secure and habitable home for their future.”

“Having multiple freehold titles within the same legal entity enables borrowing to be arranged more efficiently and on more competitive terms. We look forward to seeing the improvements they will make to the house, and look forward to hopefully growing their property portfolio.”

A new venture in collective living in North London is about to start, made possible by substantial loans from Co-operative & Community Finance, the Co-operative Loan Fund and the Ecology Building Society.

The Drive Housing Co-op will complete the purchase of a large detached property in Walthamstow on 29 July. The Victorian building, which was formerly a residential care home for children, will become home to 10 people, aged between 30 and 68, with a shared interest in co-operation, sustainability and gardening.

The Drive is a fully mutual housing co-operative. The co-op owns the property and only the tenants can be members of the co-op. Each member has a single £1 share; individual members cannot gain or lose from changes in the value of the property.

The purchase has been financed by loans from Co-operative & Community Finance and the Co-operative Loan Fund, a mortgage from Ecology Building Society, and loans from various individuals and some other housing co-ops.

Co-op member Robert Morris said: “We haven’t received any grants or hand outs. It’s important to us that we pay our own way and that the whole project is self-funding and sustainable.”

This is the first time for many years that Co-operative & Community Finance has lent to a housing co-op. Ian Rothwell from Co-operative & Community Finance said: “Lending to housing co-ops is a bit different to other co-ops. The sums of money are higher but the basic business proposition is simple: the income from rent must exceed the outgoings. As with all co-ops a great deal will depend on the people involved, and I have been very impressed by the commitment and professionalism of the members of The Drive Housing Co-op.”

The people involved in The Drive are not just going to share the premises; they are creating an ‘intentional community’ based on shared values and communal activities. They plan to grow a significant proportion of their own food and buy the rest from local and/or ethical suppliers. They also have a number of plans for reducing their impact on the environment. Education and sharing knowledge is one of their key principles.

The co-op has overcome a number of obstacles to reach this stage as Robert explained: “We had to find the property, apply for loans from Co-operative & Community Finance and Ecology Building Society, negotiate with the estate agents and vendors, apply for planning permission, raise additional loanstock funds, and meanwhile build up a strong group of like-minded people. We’ve had to explain what a housing co-op is and what our project is all about to many people who have no knowledge of housing co-ops.

“Fortunately we’ve got a lot of expertise and experience between us in our group – but we recognise these things could be a lot harder for others, which is one reason why we’d like to help other groups benefit from our experiences.”

The Drive Housing Coop used model rules developed by Radical Routes, a network of housing co-operatives. Members of The Drive also benefitted from the peer support and mutual aid provided by Radical Routes, especially in regard to business planning and legal issues concerning houses in multi-occupation.

Cath Muller of Radical Routes said: “It’s brilliant that The Drive is going ahead. It’s very hard to start a housing co-op in London because the property market is so skewed.

“The members of Radical Routes are always keen to help new co-ops, and I’m pleased to say that after a very difficult time in the market we are expecting there to be several new co-ops managing to secure property by the end of the year.”

John Lee of Ecology Building Society said: “Ecology is delighted to be involved with The Drive alongside our funding partners to help make this project a reality. We regularly provide mortgages to the housing co-operative movement, but this is the first time we have done so in London. Given the continuing problem of rising property prices in the capital, it seems to us that a co-operative approach to property ownership makes economic sense, as well as encouraging a more sustainable, low-impact way of life through sharing.”

www.thedrive.coop