The Finance

By working with a Housing Association, we can quickly build houses to suit the needs of Eastington people.

This is how it works:-

  • The Housing Needs Survey gives the number of dwellings required
  • The CLT  finds an acceptable plot that is within the Neighbourhood Plan for exception sites, but not available for commercial development.
  • A provisional agreement is made with the landowner.  The price to be agreed will be above agricultural value, as an incentive to the landowner, but below commercial building land prices because this type of site will only get planning permission for ‘affordable’ home development.
  • ECLT employs the architect (etc) with help from government grants.
  • The Housing Association (HA) and ECLT agree the housing design.
  • ECLT applies for  (and hopefully gets!) Planning Permission – this will include the ‘section 106’ that will give priority to local people.
  • The HA organises the main funding – from a mixture of their own resources, bank loans and Government grants.
  • The landowner, HA and the CLT agree the price for the land. As described above, this will be below normal building land prices and this is what helps to make the housing ‘affordable’.
  • A three-way agreement is made:-
    • The Housing Association pays the landowner for a lease on the land . This is called a ‘lease premium’ and  amounts to the agreed value of the land (minus £1)
    •  ECLT pays the landowner £1 to buy the land, including the lease
    • ECLT thus owns the land and the lease to the Housing Association.
    • The lease is for 125 years and  contains various conditions about responsibilities.
    • Under the lease, the Housing Association pays the CLT a ground rent (of £200 per dwelling per year in the case of Fullers Close)
    • The HA employs the builders to build the houses, and will be responsible for their maintenance. They will manage the mechanics of the allocations (based on Homeseeker and the agreed priorities) and  take the rental income from them.

The land is owned by ECLT in perpetuity.

ECLT owns the lease and can ensure that the Housing Association fulfils its obligations.

Our community priorities  dictate what is built and how many.  NO market value housing and  NO “right to buy”. 

Note: In Fullers Close all properties are for affordable rent; affordable ‘shared ownership’ is being considered for future projects.

All the legal back-up already exists, both in National Planning Law and in the Stroud District Council Local Plan.   ECLT is a full member of National CLT which has over 350 members, scores of whom have used this model of purchase-and-lease for a decade.

Sources of Funds – Project One, Fullers Close

ECLT is able to access funds for both Feasibility Studies and for gaining Planning Permission. By driving this process, ECLT is in a good position to organise the types of homes and tenancies that our parish requires. The cost of our first project, from inception to start on site (when the Housing Association takes over) was £88,750, comprising:

Start-up Fund from National CLT              £ 4,000

Solar Fund grant from Parish Council      £ 6,000

Feasibility Stage grant from Locality        £ 9,750

Planning Stage grant from Locality          £40,000

DCLG Grant via Stroud DC                     £29,000

There is more information on ‘Locality’ and the DCLG (Department for Communities and local Government) on the government agency websites:

Locality                 DCLG

In addition, Aster Homes, our Housing Association partner for Fullers Close, paid for most of the legal fees and engineering costs beyond Feasibility.

The approximately £4 million costs of the build was managed by Aster Homes and funded mostly by government grants from Homes England. Aster Homes sourced the balance from re-invested profits (they are a not-for-dividend company) and loans against future rental income. Aster pay ECLT about £5,000 per annum in ground rents, which helps us fund future feasibility studies.

Sources of Funds – Project Two

ECLT wanted to avoid relying so much on a Housing Association for Project Two, being much more confident about the pre-planning process and the costs associated.

Locality funding was replaced by Homes England’s Community Housing Fund (CHF) and ECLT’s experience of consultancy costs allowed us to apply for a £144,000 CHF grant in late 2019. Because of the December 12th 2019 election and then the pressure of Brexit on 31st January 2020, this was reduced to a Feasibility Grant of £72,000, eventually agreed in March 2020.

Parish Council provided a match-funding of £8,000 from the Solar Fund and, along with the first instalment of Fullers Close ground rent from Aster Homes, Project Two was able to begin basic research in January 2020 with a maximum budget of £15,000.

Significant consultancy work could be paid for once the first £36,000 of CHF grant was received in April and May 2020, with the second £36,000 due in October 2020.

As of July 2020, a national budget for the CHF had not been finalised and so the mechanics of applying for and receiving the balance of the original £144,000 expected project costs remains unclear. It is unlikely that ECLT and a Housing Association partner, sitting with a proven Feasibility Study for 28 affordable dwellings, will be denied further funds at a time of housing crisis. Shovel-ready projects are always popular.