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5 things everyone should know about Community Land Trusts


Community Land Trusts are popping up all over the UK, with the aim of bringing more buildings into community ownership in a bid to tackle some of the big social problems facing communities today. But what are they all about and why do they make good investments?

Here are the top five things we think you need to know about CLTs.

1. They’re a great replicable model which can provide a solution to the UK housing crisis.

UK cities have a significant housing problem. There are just not enough new homes being built to house the growing population, with reports estimating that we need to build around 340,000 homes each year to 2031 to meet demand, with a large percentage of these being affordable.
One of the problems is that, in cities and surrounding residential areas, house and rental prices are vastly inflated, so local people, essential key workers (think nurses, teachers and fire fighters) and families can often to be priced out, or left only with unsuitable accommodation options. The loss of families and essential key workers is extremely detrimental to these communities.
The devastating knock-on effect is that at least 320,000 people were without homes last year, according to reports by Crisis. Rough sleeping has risen by 169% since 2010 - a shocking set of statistics for the 5th largest economy.
Community Land Trusts are tackling this growing problem head on, by creating permanently affordable housing for local residents as well as vital community-owned and run amenities, such as shops, offices, pubs, cafes and gardens which in many areas having been in decline following 10 years of austerity.

2. They’re community-run organisations CLTs are not profit-making businesses. They are set up and run by ordinary people within communities who care about the effect of the housing crisis within their area and want to do something about it.

The community owns and manages the properties, ensuring they are permanently-affordable and not susceptible to hikes in house prices and available for local people who need them. See infographic below from The National Community Land Trust Network that brilliantly explains how CLTs work.


3. They’re effective

The hundreds of Community Land Trusts in the UK are testimony to the success of the concept. The community housing model is working - providing affordable, sustainable and inclusive housing in cities all over the country.

The Leeds Community Homes project is a great example of this. In 2017, following a successful Community Share Offer, they started developing 16 permanently-affordable homes in Leeds Climate Innovation District and they have plans to create 1,000 community homes in the future!

And in early 2019, Somerset CLT successfully raised enough funding to create 6 - 8 much-needed affordable homes in Taunton, where there is a chronic lack of sustainable and affordable housing for local residents.

In England and Wales, CLTs have created over 870 permanently-affordable homes that are run by communities, for communities meaning hundreds of families and individuals have not been priced out of their local areas or, worse, forced onto the streets.

4. They’re growing

The great thing about CLTs is that they are scalable and can be replicated in every community – so with enough support from ordinary people who can invest to create impact 870 permanently affordable homes could grow exponentially to meet the 320,000 capacity which is currently needed.
The National CLT Network says there are now over 320 CLTs operating in England and Wales, half of which were formed in the last 2 years. Most of these have future ambitions to continue to grow and create many more affordable homes in their area. In fact, there are plans in place for a further 5,800 affordable homes to be created in the next few years, which is great news for communities.

5. They need investment

As community-led organisations, CLTs require funding from external sources, including investments made via community share offers, meaning individual investors can use their money to support affordable housing developments.

The money invested is used to buy and develop the properties, with the aim of the investors receiving interest repayments from the money earned by the CLT from rental income generated from tenants in the properties. Potential returns are variable depending on the project, but are typically around 4% to 5% per annum.

Jamie Hartzell, Director of The Ethical Property Company says: “Every Trust needs some form of initial subsidy to be able to deliver affordable housing, but, once established, ownership by the not for profit Trust keeps the property free from speculation, and rents affordable in perpetuity. Investors should expect steady, long-term returns, and high social impact.”

Be a part of the change

As individuals, we all have the opportunity to play a part in the move towards community-led-housing that will help tackle the growing problem of homelessness in our communities.
Ethex regularly lists investment opportunities in Community Land Trust projects, the current one being a community share offer from St Ives CLT.


St Ives CLT

St Ives CLT is currently looking for investors to help fund the creation of 6 permanently-available homes in St Ives, Cornwall.

The town of St Ives is a popular holiday destination, in fact a quarter of houses there are holiday homes. Many local people are employed by the tourism industry and their wages do not allow them to afford the high rental of most of the homes there.

Take the example of a young couple, both working in catering and hospitality in St Ives, with minimum wage incomes of around £16,000 each p.a. They can find only short-hold tenancy flats (for the 6 months of the year when they are not in use as holiday accommodation) at £750-950 per week plus utilities.

This would be unsustainable if and when they decide to start a family. Their neighbours are holiday makers, changing on a regular basis and with lower regard for noise levels etc, and they live above commercial premises.

Investors in the St Ives CLT share offer will help with the purchase and renovation of the Old Vicarage Flats building in the centre of St. Ives, providing six permanently-affordable homes for rent. The flats will be managed as a community-led housing project by St. Ives CLT.

St Ives CLT forecast financial returns of 4% on investments from 2020 and the minimum investment for local residents is just £100. Capital at risk and returns not guaranteed. Find out more.

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