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Student Co-op Homes

Financial performance

Student Co-op Homes is a new driving force to expand the student housing co-operative movement in the UK. In 2019, they are issuing community shares to raise capital so that they can purchase properties across the country to lease to student housing co-operatives. Investing in the 2019 share offer is a unique opportunity to expand access to education, to contribute to a fairer economy, and to introduce new generations to co-operative ways of organising.

Business Model

With the money SCH raise from the 2019 share offer, they will be able to buy their first properties. These will be leased to student housing co-ops that are members of SCH. SCH will then use this income to cover its running costs and to pay the interest on the share capital invested through the offer.

Most importantly, SCH also plan to build reserves to ensure they can grow the student housing co-op movement on the soundest possible footing. The more money they raise, the more properties they can buy in more locations. This model is highly scalable and financially self-sustaining. SCH intend that the capital raised through the 2019 share offer will go towards acquiring properties for Glasgow, Nottingham and Seasalt (Brighton) Housing Co-operatives.

Investment Targets

SCH are aiming to raise between £100,000 and £2,000,000 in their 2019 raise. Raising the lowest amount will enable them to provide the deposit for the purchase of a property for Glasgow Student Housing Co-op, coupled with a loan which has been offered by Scotmid Co-operative.

This would make Student Co-op Homes financially viable and would kick off the growth of the sector. This would be a great start, but of course SCH would like to be able to do much more! If they can raise their maximum target of £2m SCH will be able to buy around 25 properties, allowing them to double the number of students living in housing co-ops across the country, while generating enough income to employ full-time staff and become completely self-sufficient in self-financing its growth.

SCH will use mortgage finance to top up the money raised through the 2019 offer to buy properties. The Scotmid Co-operative has already agreed a £300,000 loan to SCH to finance up to 90% of a property for Glasgow Student Housing Co-operative. SCH have also approached lending institutions for mortgages to finance other projects.

Below are indicative figures of the share investment needed by the student housing co-operatives ready to take on properties right away (these figures are based on using the funds raised for a deposit of around 30% of the property’s value):

  • Glasgow Student Housing Co-op: £90,000 – £150,000
  • Nottingham Student Housing Co-op: £120,000 – £200,000
  • SEASALT Housing Co-op (Brighton): £350,000 – £800,000

Beyond the properties that will be directly financed, SCH consider that the bigger impact of this offer is the start of a new co-operative movement in the UK and the establishment of a viable and scalable business. SCH aim for Student Co-op Homes to grow and be replicated for the co-operative model to become a dominant player in the student housing sector.


Student Co-op Homes has modelled two investment targets in this share offer. The figures below are showing forecasts based on a £2,000,000 raise, but please see their offer document for forecasts for a £100,000 raise.

In order to assess the viability of the share issue on a stand-alone basis, SCH have based its model on the conservative assumption that it would not get any future net investment (or other external cash influx).

Modelling Assumptions

Based on experience with housing co-ops, SCH have built what they think is a conservative model according to the following assumptions:

  • Mortgage interest rate starts at 3% and increases by 3% over the first 10 years (stress test measure used by some mortgage providers)
  • No inflation on property value
  • SCH receive only half of rental income in the first year (properties will be let from July 2020)
  • Inflation rate on expenditures is set at 2%
  • The interest rate on shares paid out to investors is set at 4% for all investors
  • SCH keep 5% of total share capital as liquidity before making new purchases
  • SCH include emergency repairs spending every 5 years (even though according to lease agreements, all repairs will be the responsibility of the student housing co-op and not of SCH)

Profit and Loss

Profit & Loss
Year 1
Year 2
Year 3
Year 4
Year 5
Rental Income £0 £58,771 £219,221 £327,901 £437,801
Cost of sales £0 £612 £11,182 £12,919 £14,281
Gross Surplus £0 £58,159 £208,039 £314,982 £423,520
Administrative costs £44,380 £40,028 £40,825 £62,523 £63,773
Operating Surplus (£44,380) (£82,182) £26,673 £46,654 £75,810
Grants/Donations/Interest £51,000 £32.181 £32,264 £194 £213
Total Income £51,000 £90,952 £251,486 £328,095 £438,014
Total Expenditure £44,380 £140,952 £192,548 £281,247 £361,991
Surplus before tax £6,620 (£50,001) £58,937 £46,848 £76,022
Surplus after tax £5,362 (£50,001) £47,739 £37,947 £61,578

Cash Flow

Figures are based on a £2,000,000 raise.  Please see the share offer document for forecasts based on a £100,000 raise.

Cash Flow
Year 1
Year 2
Year 3
Year 4
Year 5
Operating Income £51,000 £90,952 £251,486 £328,095 £438,014
Operating Cash Out £44,380 £41,898 £42,049 £75,557 £75,122
Capital Cash In £0 £2,250,000 £1,327,777 £1,477,777 £1,577,777
Capital Out £0 £1,987,083 £1,593,292 £1,594,417 £1,595,167
Total Cash In £51,000 £2,340,952 £1,579,263 £1,805,872 £2,015,791
Total Cash Out £44,380 £2,034,293 £1,719,034 £1,841,248 £1,941,812
Closing Balance £6,620 £313,278 £173,507 £138,130 £212,109


  • 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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