Fund Affordable Homes - Loans & Community Land Trust (CLT)

THE IMPACT YOU CAN HAVE

Maximise the impact of your philanthropic money to achieve a social as well as financial return. You can support community-led housing schemes to develop and build genuinely affordable homes.

Community-led housing schemes are growing in number, as the housing market stretches ever further away from people who wish to live in areas with high house pricing in comparison to an area’s average wage earnings. Villages are being occupied by an older generation as the younger people move away to find more affordable places to live, taking with them their children. This in itself affects the area as schools don’t have anyone to teach which can cause closures, and local shops and pubs struggle to remain in ever-dwindling populations. These community hubs simply cease to exist in many villages all over the UK.

Community-led housing schemes come in a variety of forms, shapes and sizes. They can build new homes, create homes from empty properties, protect existing decent, affordable homes and provide homes of all types of tenure. Ultimately, it is communities that are taking a leading role in providing housing solutions for people in need. Often people working in low income jobs that without an affordable home would be at risk of homelessness.

WHY MAKE A SOCIAL INVESTMENT THROUGH THE CLH FUND?

As a pioneering social investment fund, we have been managing philanthropic social investment for community housing projects for 11 years. We are currently the only nationwide lender of much-needed pre-development finance (e.g. to complete works prior to securing planning permission). As evidenced in the research we commissioned in 2018, Helping Communities Build, accessing early stage finance remains a key barrier for community-led housing schemes to take off. Community-led housing groups are still in need of risk-bearing, flexible and affordable finance in order to flourish, in conjunction with Government grants now on offer.

Your philanthropic money will make a hugely positive social return, but, after expected capital losses and management fees, an overall loss of 5%-10%.

Social investment opportunities for this fund are open until 30 April 2020.

How the fund will work

We provide finance at various stages by offering the following products:

At Site and Plan stage: pre-development blended finance (part grant / part loan) and a standby facility to raise community shares or act as a bridging loan
At (Pre-)Build stage: a land purchase facility with an element of blended finance
At Build stage: development loans acting as a junior lender
Other: Standby facility / bridging loans for Enabling Hubs / umbrella CLTs

In the early stages we will offer blended finance in order to:

Reduce overall interest fees for groups; ensuring social investment is more accessible to them
Reduce the risk of lending to our funders
Provide additional capacity to schemes, giving them an additional cash buffer when required to commission professionals that might reduce the overall timescale to reach planning permission