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Can the Community Land Trusts be the solution for the critical UK housing crisis?

The scale of the problem

Most cities in the UK have a housing crisis. There are not enough new homes being created to meet the increasing demand with reports estimating that we'd need to build around 340,000 homes every year to 2031 to meet demand, with a large proportion of these needing to be affordable.

One of the problems is that, in cities and surrounding residential areas, house prices and rental prices are significantly inflated, causing local people and families to be priced out, or left with unsuitable accommodation options. These communities are losing vital services and amenities as a result of the loss of families.

This is causing major problems in homelessness, with at least 320,000 people being without homes last year, according to reports by Crisis. In addition, rough sleeping has risen by 169% since 2010 - a shocking set of statistics for an economy that is is the 5th largest. 

The housing crisis in England is at epic proportions and both Crisis and Joseph Rowntree Foundation have said that recent pledges by the government to invest £2bn in affordable housing just don’t go far enough only delivering a mere 10% of the social rented homes needed each year.

The community-focused solution to create affordable homes

With the lack of ambitious reforms from government  some local groups are taking matters into their own hands. Locally set up community organisations are forming Community Land Trusts (CLTs), with the aim of creating permanently affordable housing for local residents as well as vital community-owned and run amenities, such as shops, offices, pubs, cafes and garden which in many areas having been in decline following 10 years of austerity. Properties run by CLTs have the benefit of being permanently affordable.

How it works

Once formed, the CLT buys, or is given the land on which they plan to build the community homes or amenities. They then access the available resources to construct and create the properties.

Funding for this can come from a number of sources, including donations, grants, loans or share offers.
The homes and amenities are then usually rented out, at an affordable rental price, to people in need of homes in the area. The rental cost is often capped for the lifetime of the property, meaning permanently affordable homes in areas that need them most.

The families that rent the properties benefit from additional money to spend on other essentials each month, while the communities benefit by keeping these families where they belong.
There are now over 290 CLTs in the UK and there is potential for many more.

What is needed?

The National Community Land Trust Network is an organisation that aims to have a CLT in every UK community, ensuring affordable housing opportunities in each.

They are calling for the Government to recognise CLTs as a key part of the solution to the current housing crisis. The organisation has created a number of resources to help and support new CLTs to get off the ground. Funding is a key factor in the setting up and running of a CLT. This is often needed to purchase the land, develop the properties and cover administration costs.

CLTs often issue community share offers, allowing people to invest to raise the funds needed to complete the projects. The aim is for the investors to receive interest repayments from the money earned by the CLT in rent on the properties.

Why supporting CLTs is important

For people who want to help address the homelessness crisis in the UK then investing in CLTs provides the opportunity to use your money to address one of the key social issues of our time. It’s clear that the scale of the problem is so significant that a new approach to financing affordable homes is needed. CLT’s provide that new approach providing much needed affordable homes and vital community services for areas that have been struggling and underfunded for years.

Over the next few months Ethex will have a range of CLT’s looking to raise finance via our platform so please consider supporting our current raise for St Ives CLT or signing up to receive our updates to be the first to hear about new CLT offers.

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