What if... land was available for affordable self-build homes in Farnham?
Just a short distance from where the mid-Victorian Farnham Freehold Land and Building Society had its West End Estate, Surrey Council Council is proposing to build a considerable number of houses on part of the old County Farm. Some of these houses will be so-called “affordable” at 80% market value. But what if some of this SCC land was made available for a local group to build their own genuinely affordable homes. Let’s imagine a “Farnham Self-Builders Association” (FSBA) made up of, say, twenty families and individuals who have successfully applied for this land under the 2016 Right to Build legislation. Imagine: the FSBA has incorporated as a mutual organisation to plan, design and finance their development; they’ve studied the experience of other community self-builds in the UK, trained themselves to work with a local SME builder and gone on, adding their “sweat equity”, to create a beautiful neighbourhood of diverse and ecologically resilient homes, all at a cost below that of so-called “affordable” housing in Farnham.
Average house price: £442,543 in Waverley. Minimum deposit needed: £22,127. Salary needed for mortgage: £99,000.
Surrey Live 22 July 2020
How could this happen? Right to Build and access to land
Waverley Borough has a Right to Build Register; a self-build group could register and request the LA to provide them with land to purchase and help to facilitate their project. Provided this local group intends to build affordable homes and is prepared to make this affordability a permanent feature of their homes then collaboration with a Community Land Trust (CLT) would be the next step. The CLT purchases the land from the LA and guarantees affordability in perpetuity. The land is leased to the self-build group and the CLT grants them a license to build their homes. The equity value in a house belongs to the self-builder while holding the land in trust maintains affordability. Land rents service the CLT loan debt while other procurement funding is secured through the self-builders’ own mutual organisation. There are examples of this model in Holland.
Community Land Trusts (CLTs) and land value capture
Legally defined in the 2008 Housing and Regeneration Act, CLTs are used to develop housing in communities where affordable homes are hard to find. They are set up by ordinary people fed-up with the housing situation in their communities. They are not profit-led although a CLT does need to generate income to operate. They have open membership to all in the local community and the CLT is managed by a board elected by the membership. Their main role in making homes affordable is by negotiating for land at sub-market prices. Today land value inflates hugely with planning permission and this gets passed on to the housebuyer as a significant part of the retail price. Capturing some of this land value helps to make homes more affordable. Removing the land from the market and placing it in a CLT ensures that the homes remain affordable in perpetuity. For the past decade CLT’s have worked in partnership with Housing Associations to manage procurement, often handing the entire development over to the HA. Increasing difficulties in finding land, securing planning permission and drawing down capital grants are raising questions about this partnership. Some innovation is required!
Mutual Home Ownership Model and the role of a Housing Hub
Recently a new form of co-operative housing has emerged that enables members to build up withdrawable equity shares in the coop property. Local people interested in this model form themselves into a Mutual Home Ownership Society (MHOS); a pioneer example is LILAC in Leeds. In this model the co-operative, rather than a CLT, purchases the land, finances the planning and design process and finds capital funding for construction. This model creates an unusual form of ownership tenure and making it more widely understood and acceptable will take time. Establishing a local Housing Hub is essential to give time and space for a process of consideration and incubation within the local community. Community-led housing itself is not a generally familiar approach to meeting housing needs anyway and it’s more complex collaborative practices are unknown to many people. Holding a community-wide conversation that imagines new possibilities and grows the confidence to develop them is what Homes for Farnham Housing Hub is about.