SEASALT student housing project
BHCLT will be the owner of the property with SEASALT taking on an initial lease of 7 years, with a commitment to extension. The lease clarifies who is responsible for what and timeframes, with the day to day management of the home, the internal (nonstructural) repairs and internal maintenance being undertaken by SEASALT. BHCLT will continue to offer further advice and support where necessary..
Setting the rents
The rents are based on an analysis of the student housing market in Brighton and Hove. Weekly rents are projected at £105 per person, with an annual rise in line with inflation. While this fits into the government definition of ‘’affordable”, as set at 80% of market value, BHCLT recognise that this is still quite high (the Local Housing Allowance, for example, is currently £98.96), and furthermore is predicated on rises and falls in the market. BHCLT's aim is for rents that are genuinely affordable and based on incomes. It is not possible to achieve lower rents with property prices as they stand at the moment.
The model contains relatively high allowances for voids and for maintenance costs, as BHCLT wants to ensure that the property is well-maintained, project well-run and ensure they have allowed enough contingency. After the initial years, if turnover of tenants is low and well-managed, as planned, it will be possible to reassess rent levels.
Ongoing costs and headline figures
Ongoing costs for managing the property have been decided in partnership with SEASALT and drawing from organisational knowledge of setting up and running housing co-operatives. They include 8% allowance for voids, £6000 annually budgeted for repairs and maintenance (with an additional £6000 allocated every five years for emergency repairs), insurance, and overhead/admin costs for both SEASALT and BHCLT. As this is the first project, BHCLT will reassess the budget in the initial years and reallocate expenditure if necessary.
The headline figures also include mortgage repayments and 3% annual interest payable on community shares (set at the minimum target raise).
The table below shows the overall project cost for the first five years, including both BHCLT and SEASALT expenditure. The overall BHCLT financial projections and cash flow position show the income to BHCLT through the lease and the expenditure that falls within its field of responsibility. It also models the projected 5% annual withdrawal of community shares.