Katharine West, part of the Resonance Community Assets Investment Team, talks about how property ownership brings many benefits to communities and how Resonance Community Developers is helping communities achieve their goals.
Resonance Community Developers (RCD) is a social impact investment fund that provides both the support and the finance to enable people to come together to build their own communities.
A community can apply for funding from RCD if it has already identified the need for a development and is driven by the energy of people that want to champion a more sustainable and equitable solution for building new communities. Most communities can identify a need for community led housing, sports and leisure and renewable energy projects, but it is the momentum and commitment of the project champions in the community that will lead to the successful completion of projects that meet local need. It is this community led and owned property development that empowers people.
Empowering communities through property ownership can be demonstrated by the simple analogy of buying your own house. If you buy your own house, you take out a mortgage where you pay back the amount you borrow over time plus the interest. As the debt reduces the proportion of the house you own increases. As the mortgage payments reduce, your personal wealth improves, you have more disposable income, you can let the property for more income, and you have more equity in the property against which you can secure further borrowing. Not surprisingly owning your own home gives people a sense of security and radically improves wellbeing.
If you wanted to build your own home, there is a further hurdle – before you can take out a mortgage you would need to find the money to build the property. This ‘development finance’ is paid back, plus the interest during the development period, by taking out a mortgage on your new home. It is this development finance that is difficult for communities to access; they are not considered a ‘safe bet’ for the financiers as they don’t have assets or a track record of producing income! The interest rates are therefore highly inflated to reflect the risk or the loan is refused.
This is where RCD can help. It can provide development finance to communities at a sensible cost, which is not charged until the development is completed, when the property is effectively refinanced through a long-term mortgage. The community will benefit through property ownership – the community’s wealth improves, the community’s income increases over time, the property can be let to provide income, over time the community gains more equity in the property against which further borrowing can be secured. Not surprisingly property ownership gives the community more security and improves wellbeing!
This is why Resonance has set up RCD, but it doesn’t stop there. We also support the community, with the help of local partners, right from the very beginning of their journey. So if you have the drive and commitment in your community to deliver a truly community owned and led scheme do please contact the team at [email protected] and visit the website for further information.
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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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