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Brighton & Hove CLT

Financial performance

With the capital raised from their 2020 share offer, BHCLT will buy their first sites and properties. They will lease the land or property to one of their community-led housing groups, who are also registered co-operatives, or community benefit societies. Income from the leases will be used to pay back mortgage costs, interest on share capital, ongoing maintenance and development of the properties and running costs.

Project Scenarios

The following project scenarios are headline figures for the five years from 2020 for projects that BHCLT are working on. Some of the projects are still in early feasibility stages, where community share capital will enable BHCLT to progress the project. This means they are also subject to change.


Project 1 - Property Purchase

BHCLT are working with a local housing co-operative and are actively looking to purchase a large property to lease for shared living. The following example is modelled on a property they are currently looking at, with 14 bedrooms. Rents are set at below 80% of market rents. The group takes on responsibility for the renovation and management of the properties, and emergency repairs spending is budgeted every 5 years. Void levels are set high to allow for potential tenant turnover and mortgage levels are set at 4.25% but stress tested up to 7% over the first 10 years. BHCLT allow for three months without rental income to allow for initial works to be done on the property and for final allocation of tenancies.


Project 2 - Large scale new build

BHCLT has been working for two years in partnership with Coldean Community Organisation (CCO) to bring forward a community-led housing project in Coldean. It is their most ambitious project to date. BHCLT have already secured £272k in pre-development grant funding, including a 10% own contribution.

BHCLT and CCO are working with landowner Brighton & Hove City Council to secure a 250-year lease on a 3.9 hectare site (with approximately a 2.3 hectare developable area) in Coldean, to develop around 70 homes. The project is currently at early-stage feasibility / planning stages and will entail considerations of a range of delivery approaches, including direct delivery through an appointed main contractor, partnering with an experienced new-build developer, and partnering with the council. Capital raised through the 2020 community share offer would support acquisition of the site, obtain planning and undertake detailed design (in tandem with grant funding) and leverage additional funding to enable delivery. It’s envisaged that a minimum of 60% of the development would be affordable housing.


Project 3 - Community Self Build

This project is still in early community-led housing proposal stages. It is included in BHCLT's 2020 community share offer as it represents the type and scale of project that the majority of their community-led housing groups want to deliver. Community share contribution enables BHCLT to be in a stronger position to access land options for one of these groups going forward.

BHCLT purchase land and work with a local group to develop a mix of 10 houses/flats. These are all for affordable rent for local individuals and families, with initial target rents set at below the Local Housing Allowance. Grant funding and capital raised from community shares secure the loan facility and cover pre- and early development costs. The interest-free period on the community shares provide additional contingency for the development period. The mortgage is interest-only for the initial year and drawn down in stages, when required. As in scenario 1, the model is stress-tested to allow for potential increases in variable mortgage rates. On completion, the community-led housing group take on responsibility for managing the properties, with budgets for maintenance and management based around well-established and tested figures for existing housing co-operatives and small local housing associations.


2020 Share offer Scenarios

For their 2020 share offer, BHCLT have modelled two projections (which can be found in full on pages 14–15 of their share offer document).

These are based on minimum and maximum raise amount. The first is a single project scenario, with a minimum raise of £385,000. This is modelled around the scenario of buying a large property and leasing it to a member housing co-operative, which is the closest project milestone, and would start to build their assets.


Cash Flow

 

Note

  • Forward-looking statements are merely unaudited projections based on a number of assumptions and should not be relied upon as indicators of future performance. There is no guarantee these projections will be achieved.

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