Community-led housing

ANY HOME OR PROPERTY GIVEN AS SECURITY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER DEBTS SECURED ON IT
We provide mortgages for housing co-operatives, housing associations, cohousing groups, Community Land Trusts and other community-led projects

We see social housing provision, an increase in affordable homes and the development of vibrant housing communities as key parts of a more sustainable housing mix. We recognise the importance of maintaining housing as affordable to local communities in perpetuity and we are keen to support projects that are structured to protect affordable housing provision for future owners and tenants.

We specialise in mortgages for a range of tenures and types of occupation and our mortgages for community-led housing are available to:
• New and established housing co-operatives
• Housing associations
• Community Land Trusts
• Cohousing groups and individual members
• Charitable providers of affordable housing
• Community self-builders
• Mutual Home Ownership Societies
• Self-help housing groups and homesteading

In addition to providing housing development finance to community-led groups, we are keen to work in partnership with organisations to promote the availability of residential and shared ownership mortgages to members. For new build projects, homes need to achieve an A or B rating under the Energy Performance Certificate (EPC) scheme for us to consider lending.

Key Features

  • We offer a straightforward, tailored approach to financing your community-led housing project
  • Each application is assessed individually and a site visit may be arranged with you to discuss your project, where appropriate
  • Our rates vary by project for community-led housing
  • Mortgages are available on a capital and interest repayment basis, however interest-only periods are negotiable to support new developments and refurbishment stages for existing homes
  • Mortgage terms are available from 1 to 30 years, subject to eligibility
  • You can borrow up to 80% of the property’s value, subject to eligibility
  • For Housing, Housing Associations (including Community Land Trusts) up to 80%. For Housing co-operatives, Co-housing and Mutual Home Ownership Societies up to 75%.
  • Stage release payments are available as the value of property increases via building or renovation work, subject to our maximum loan-to-value at any given time
  • A non-refundable mortgage application fee of 0.25% of the sum applied for is payable on submitting a formal application
  • An offer acceptance fee of 0.50% of the sum approved is payable on acceptance of a formal mortgage offer
  • An early repayment charge may be payable if you repay all or part of your mortgage within the first two years
  • Borrowers must be aged 18 or over.  This mortgage is only available to UK registered businesses.

Community-led housing mortgage products for housing co-operatives, housing associations, limited companies and other organisations are not regulated by the Financial Conduct Authority.

What we lend on

We don't have a 'tick box' approach to assessing projects –in many instances, we'll welcome projects that standard lenders reject. We will consider:

  • Live/work units
  • Timber frame/clad or steel frame
  • Earth sheltered dwellings
  • Non-traditional constructions, such as straw bale, thatch, rammed earth, and wattle and daub
  • Structured insulated panels
  • Insulated concrete forms.

For new build projects, homes need to achieve an A or B rating under the Energy Performance Certificate (EPC) scheme for us to consider lending.

If you are intending to undertake renovation or conversion work as part of your plans, we will expect the measures you propose to include energy efficient measures and sustainable materials.

Our mortgages are available across England, Scotland, Wales and Northern Ireland.

 

Further reading

 

Rated as an ethical Best Buy for our mortgages and savings

Our fees

Our fees and charges:

  • A non-refundable mortgage application fee of 0.25% of the sum applied for is payable on submitting a formal application
  • An offer acceptance fee of 0.50% of the sum approved is payable on acceptance of a formal mortgage offer from us
  • We will agree a valuation fee with you using a local qualified chartered surveyor. Payment of the fee agreed will be required from you in advance of the Society formally instructing the surveyor to undertake a valuation report
  • An early repayment charge may be payable if you repay all or part of your mortgage within the first two years.

Our service, fees, tariffs and charges

The Society reserves the right to amend existing services and charges, or to introduce new ones.

Any change to charges will only reflect the increased operational costs of providing the service. You will always be notified before any changes are implemented.

For further details and tariff information please see our current Commercial rates and charges leaflet.

 

Community-led housing FAQs

Do we need to provide planning permission for a new build development?

Yes. We need at least outline planning permission to start the application process and detailed planning permission before the mortgage is released.

What information do we need to progress a mortgage application?

You’ll need to have a specific project in mind which needs to be supported by detailed plans, including a breakdown of material and labour costs and an indication of the energy standard you are building or renovating to. We will also ask for recent financial accounts and bank statements where appropriate, along with financial projections to show how your project will service your mortgage repayments and other ongoing financial commitments

What deposit do we need for our mortgage?

You need a minimum deposit of 20% of the purchase price or value of the property/ies being mortgaged, whichever is the lower.

Do we still need a deposit if we already own the land and have planning permission?

No, you don’t always need a deposit; we can lend based on the value of your land or property, providing you already own the land and it’s mortgage-free. Also, if you need us to, we can help you repay any outstanding finance on the land.

How much will our mortgage cost a month?

As soon as we know that we can help, we’ll provide you with an indicative illustration, showing how much your monthly repayment will be for the amount you want to borrow, over the term you require

How long do we have to complete the build or renovation?

Subject to planning constraints, we allow a maximum of 2 years for you to complete the build or renovation.

Do you offer stage payments?

Yes, although we do not release payments at set construction milestone stages (e.g. foundation, wall plate etc.). We release funds as and when the build progresses and release up to a percentage of the increased value of the property.

Can we have interest-only during the build or renovation phase?

Yes, we can offer an interest-only period during the construction or renovation phase until rental or sales income can service capital repayments.

Does Ecology require a particular build warranty on completion of my project?

A build warranty is not a mandatory lending requirement of our mortgage and we are happy with a Building Regulation Completion Certificate. However, if you wish to take out a build warranty for the completion of the property then this is acceptable to the Society.

Do we need to have been established for a minimum period before you will lend to us?

No, we can consider lending to new groups in support of their first project, subject to receipt of a robust business plan.

Do we need to have a minimum number of properties or members?

We can consider projects with a single property. If you are a housing co-operative, we require that you have a minimum of four independent resident members, and that a minimum of 50% of members are in paid employment.