IMPACT THEME: Housing & Homelessness; Community & Local Democracy
WHAT THEY DO: Provide affordable housing in the North Devon area, allowing families to benefit from staying in the area in which they grew up and are working.
YEAR FOUNDED: 2005
INVESTMENT AMOUNT: £94,500
INVESTMENT SOURCE: Resonance Affordable Homes Rental Fund
INVESTMENT PURPOSE: To purchase new affordable homes
DEAL STRUCTURE: 8 year secured loan from the Resonance Affordable Homes Rental Fund (3% total cost p.a.)
All across the UK, people facing challenges in their neighbourhoods are getting together to provide the solutions that big organizations – public or private – are unable to carry out. We know because they get in touch and tell us about it.
In Holsworthy, young families were being forced away by sky-rocketing rents and house prices. If the town and the surrounding villages were to survive with the schools, shops and local firms intact, there needed to be new homes built in which people could afford to live. Volunteers from the community got together and formed a Community Property Trust (CPT), identified a site and a method of providing homes affordably, and then faced the problem common to all: finance in a period of public cutbacks.
Holsworthy CPT, using a short term construction loan built the homes but a construction loan isn’t the end of their story. If homes are to be kept by a community group and let out affordably, instead of sold for immediate income, who would pay off the construction loan? The Affordable Homes Rental Fund agreed a refinancing deal that did more than mainstream lenders could: It took 100% of the net rents into account and a higher loan to value, meaning more cash was available immediately. In a few years’ time, this flexible loan will have paid down enough capital to allow Holsworthy CPT to refinance with a mainstream lender.
Torridge is a rural area in which smaller communities can struggle to retain a balance of housing tenures and prices. HCPT’s scheme is beginning to contribute to reversing this trend and has created a more cohesive community. The majority of tenants and shared owners are employed locally and, those with a young family, contribute to sustaining the local school.
Little has changed since Holsworthy CPT and the AHRF closed their deal and the impact locally of housing a family that otherwise could not afford to live and work in the town, connected to other family members, has remained positive. As in 2013, HCPT continues to plan further developments locally, such as two further homes for shared equity and its leadership is evident in this momentum and in the engagement of local landowners and developers.
The greatest impact in this sphere is the availability of homes to rent at all. Rents are broadly in line with local Open Market Rents (OMR) rather than ‘social rent’, but this is below the Local Housing Allowance (LHA). This is in order to allow the scheme financial model to work. The rent is deemed affordable in the local context of a working family. Rent rises have been implemented at RPI as per the financial model supported by AHRF and the key message is to understand the rent level as ‘intermediate’ rather than ‘social’ rent.
Holsworthy CPT has a strong commitment to providing secure, affordable housing to eligible tenants and there has been little movement in the resident group over the last few years, demonstrating that residents are treating these properties as a home in which they want to live for the long term. There remains an opportunity to become a shared owner, once the family can access a mortgage, which had been the original intention.
Resonance Limited is a company registered in England and Wales no. 04418625
Resonance Impact Investment Limited, a subsidiary of Resonance Limited, is authorized and regulated by the Financial Conduct Authority (FCA). Firm number 588462.
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