Glyn Thomas: affordable housing, mutual solutions for London
Glyn Thomas: affordable housing, mutual solutions for London

Let’s look at new and innovative policies which the boroughs could implement.  One of the most serious problems Londoners on modest incomes face is accessing genuinely affordable housing.

Our first priority should be to build more housing and do so as a matter of urgency.  Traditionally, Labour has majored on building council housing.  Whilst this is very important, we should also be prepared to look at other new and innovative methods of producing houses that people will want to live in.  It’s not only about bricks and mortar.

Realistically, most of the housing that will be built will be for rent or leasing.  But people want to have some control of the way that their homes are managed.  Co-operative or mutual ownership would provide a greater sense of ownership and control than the conventional landlord and tenant arrangement does either in the public and private sectors

What is Mutuality?  Mutual organisations are not-for profit bodies owned and run by their members.  In the UK, the mutual sector has been in existence since the 18th century, and includes very large organisations like retail co-operative societies, building societies, mutual insurers and friendly societies but also small organisations like allotment societies, credit unions and working men’s clubs.

Mutuals are about self-help, democracy, social responsibility and caring for one another.

Mutual Home Ownership: Intermediate Housing for younger people

Given the high cost of housing in London, home ownership is little more than
a dream for many younger people. One way of addressing this would be through  mutual home ownership, providing residents with low cost housing and the ability to save up a deposit for later house purchase.

With mutual home ownership schemes flats are built by a fully mutual housing co-op on land leased from a community land trust,  All tenants would be members of the mutual home ownership society.

These schemes are suitable for people who can’t afford to buy but who are not eligible for social housing due to their income or assets.  Public funds could seed the scheme either as grant aid or gifting surplus public land to the community land trust (CLT) or both.

Tenants would pay two amounts monthly, the rent and a contribution towards the joint mortgage. The rent would be substantially less because there is no charge for land which remains the CLT property in perpetuity. The same applies to the mortgage charges. Services charges should also be lower as a result of resident-led management and scrutiny. When tenants move on, they would receive a proportion of the rise in value of their flats during their residency, and the funds could form a deposit for house purchase.

Purpose-built retirement housing for older people

As we get older our housing needs change but present housing availability to meet these needs is very limited. The physical design of homes is often no longer fit for purpose i.e. too many stairs, expensive to heat etc. They may be up a steep hill or far from amenities.  Reduced mobility may be a problem bringing with it issues related to isolation and lack of socialization.

For people living on their own, loneliness can also be a big problem; they may go for days without speaking to anybody. The problem may be exacerbated if they are frail or have mental health problems. Transport issues can also become more pressing if they do not drive. Dealing with builders, plumbers and utility companies can become an intolerable burden.

Mutual Retirement Housing removes these worries, providing residents with a better quality of life. It ensures everyone an equal say in how the place is managed. But equally everyone would have their own front door key and be free to enjoy their privacy. Experience in existing co-operative housing schemes with elderly residents  shows residents tend to look out for each other, providing companionship for those who feel in need of it.

Involvement in property management often bolsters self confidence and reduces dependency. Financial advantages arise as resident management would also ensure  running costs and service charges are kept to a minimum. Two models of Mutual Retirement Housing proposed in this paper involve:

  • [1] a modified form of Commonhold
  • [2] a modified form of mutual home ownership
[1] With Commonhold schemes, everyone owns their own flat but jointly own the common parts and land on which the building stands. The commonhold association is a mutual which co-operatively manages common parts of the property i.e. the block structure, roads and lighting, car parks, lifts etc. Commonhold would be suitable for those retirees able to purchase in full from the outset.

[2] A modified form of mutual home ownership would be very similar to the above for younger people, or for many older, low income owner-occupiers currently living in poor quality housing. Often they cannot afford to bring their homes up to a good standard of repair; they may be ‘asset rich and income poor’. Mutual home ownership would be particularly suitable for retirees who have substantial assets but not enough for outright purchase.

Mutualisation of social housing

Ownership of social housing in London varies from borough to borough. Some have retained their stock, some have transferred stock to Housing Associations while others have set up Arms-Length Management Organisations [ALMOs]. Lewisham has gone further and transferred part of its stock to a Community Gateway Scheme, a full mutual.

ALMOs are a half-way house arrangement introduced for political reasons to placate local authorities who wished to retain their stock. A more advantageous arrangement would be Large Scale Voluntary Transfer [LSVT], where housing ownership and its land pass to a mutual not-for-profit organisation.  Here residents participate in the management and future development of their estates, and access to greater funds for repairs and capital renewal is easier.

Borrowing would not be restricted by having to comply with the PSNCR [Public Sector Net Cash Requirement], and it would be possible to raise private finance in the City. Several mutuals models are available such as the Community Gateway Model, the Community Housing Mutuals as in Wales, the new Rochdale model which is a tenant/employee hybrid coop etc.

These schemes will only work if they have the full tenant support at all stages; simple acquiescence is not enough. If tenants support mutualisation of their homes it would be for them to decide what form it should take.

Glyn Thomas is a Board Member of the CDS Co-operatives and the Labour Housing Group

Creative, Affordable Housing Solutions for London
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