Community land trusts: an answer to Britain’s housing crisis?

Community land trusts in London and elsewhere in England are allowing people to buy their homes at a cost linked to how much they earn.

St Clements on Mile End Road has been a popular spot for London’s ruin addicts and ghost hunters over the past decade. Built in 1849 as a Victorian workhouse, it became a psychiatric hospital before falling into dereliction in 2005.

Cold and empty for too long, this month marks a new beginning for the grand old building. A long-running community campaign has seen the place renovated to provide housing for the capital’s crowded East End.

The first residents are ready to breathe new life into the place when they move in this month. St Clements’ transformation has happened in a strange and impressive fashion.

Rather than waiting for the big developers to take over and capture all of the site’s financial value, a group of local campaigners from Citizens UK set up their own community land trust (CLT) to gain ownership of some of the homes and control their pricing.

The former workhouse St Clements.

Now named the London Community Land Trust, the group has been able to get 23 of the 252 homes on the site, having won over the landowner, the Greater London Authority, during Boris Johnson’s reign as Mayor of London. Peabody will manage another 51 homes as social rented properties, while Linden Homes will sell the rest privately.

Although it’s a relatively small proportion of the site, the London Community Land Trust’s organisers believe the model they are using here in the East End promises a brand new method of delivering genuinely affordable housing across the UK.

They have been able to sell their 23 homes at roughly one third of market value, a feat made possible through the game-changing idea of linking house prices to local earnings.

It has been described as “the answer to London’s chronic shortage of housing”

So the CLT’s one-bedroom flats here – just a few miles east of the City of London – have been priced at an astonishing £130,000 (compared with the market average of £450,000).

The two-bedroom homes on the site have gone for only £182,000, while the three-bedroom homes were just £235,000. Paul Regan, chair of the London CLT, describes it as “the answer to London’s chronic shortage of housing”.

Calum Green, one of the London CLT’s directors, explains that prices were capped in line with average annual earnings in the borough: around £33,000.

The price calculation was based on a 10 per cent deposit, and the principle no-one should have to pay more than one third of their monthly income on housing costs. He says community organisers have fought to give local people the chance to own their own home without obsessing over it as an investment.

“It should be a place the new residents want to live for many years,” says Green. “They are homes first, assets second. It’s not about the property ladder and how much profit you can make.”

DID YOU KNOW…

If you pay for the magazine you should always take it. Vendors are working for a hand up, not a handout.

What happens if new residents want to sell up in a few years’ time? Green says they will be given the chance to sell back to CLT, or to others on the market. But the price will be set by the London CLT and will only go up in line with local earnings (and will remain the same if earnings do not increase).

“Because residents will be paying less in mortgage payments than they did renting privately, they should be able to save some money if they want to try to buy on the open market later,” he says.

We both have good jobs, but London prices are just so crazy that nothing has been affordable

At the moment the new St Clements residents are excited about moving in, delighted that home ownership has been made possible.

Ewa and Marcin, both NHS workers in east London, are moving in to a “really lovely” two-bedroom flat on the site. The couple have a joint salary of around £60,000 but have struggled to buy on the open market. Their new mortgage payment of around £1000 a month was the same amount they were paying to rent nearby.

“We both have good jobs, but London prices are just so crazy that nothing has been affordable,” Ewa explains. “Our son has just started school so we’re settled in east London, and this is an amazing opportunity to have some security here. We feel very, very lucky.”

Illustration of the refurbished St Clements (Linden Homes).

Although the work has happened on a small scale, there is growing interest in the potential for the community-led model to meet more of Britain’s housing needs. Back in 2010, there were only 36 CLTs, but there are now 225 independent groups, with many boasting ambitious building plans. More than 700 homes have already been built by CLTs, with another 3,000 now in the pipeline before 2020.

Catherine Harrington, director of the National Community Land Trust Network, believes the CLT model has huge potential and hopes the government’s £300m Community Housing Fund gives community groups a fantastic opportunity to build more.

“The model could be a real contender in the housing market. I think the excitement is partly driven by the frustration with developer-led housing projects that are priced out of the reach of people living in the area. It can help combat ‘nimbyism’ by giving people a say in the kind of new housing going up in their area.”

Buoyed by the success of St Clements, the London Community Land Trust now has big expansion plans. A deal has been made with Lewisham Council to build on a plot of land deemed surplus to requirements, and discussions are also under way to develop more housing in Croydon, Redbridge and Southwark.

Big Issue Invest, the social investment arm of The Big Issue Group, has helped finance the ground-breaking work of the London Community Land Trust. Daniel Wilson-Dodd, investment director at Big Issue Invest, who also sits on the board of the CLT, thinks new approaches to house building are desperately needed.

Illustration of the refurbished St Clements (Linden Homes).

“Community land trusts have so many advantages,” Wilson-Dodd explains. “They give residents the benefit of owning their property whilst locking housing in at affordable rates.

“At the moment we are not building enough affordable housing. We’re not going to solve the housing crisis doing more of the same thing. Community land trusts provide a real, compelling alternative.”

londonclt.org / bigissueinvest.com

WHAT IS A CLT? THE BIG ISSUE GUIDE
  • A community land trust (CLT) is an increasingly popular way for small organisations set up and run by ordinary people to build or restore homes for use by the community. There are now 225 CLTs with plans to build 3,000 homes by 2020.
  • If a CLT can obtain land or secure a long-term lease on a site, it can dictate the terms of the rent or insist on sale conditions for new homes. While the model restricts the ability of a resident to make a profit when moving on, it allows the trust to make sure the asset is affordable for future residents.
  • In Liverpool, the Granby Four Streets CLT was given 10 empty terraced homes in the city to restore. So far, five have been rented out by the CLT, with three more put up for sale for £90,000 – a price linked to the Liverpool living wage. In the next phase, the CLT will refurbish derelict shops and set up an arts hub.