The government has put building more homes firmly at the top of its agenda.
A housing-friendly Budget last autumn included the removal of stamp duty for shared ownership buyers, and a scrapping of the cap on how much local councils can borrow to fund development.
More recently, March’s spring statement saw a £3bn fund set up to help build 30,000 affordable homes across the country as the government’s focus shifts away from ownership to acknowledge the need for a variety of housing options.
With all this going on, it’s perhaps unsurprising that another recent pot of funding slipped under the radar for many, namely housing minister Kit Malthouse’s recent £6m fund to support the creation of affordable homes through community land trusts. The move builds on the £163m community housing fund, launched in 2018, and allows people to band together and apply for up to £10,000 to cover the start-up costs, such as legal fees, of getting a community land trust off the ground.
For local authorities, this fund – and the schemes it seeks to facilitate – could be a way of meeting acute local housing needs. Understanding what they are and how to support them could be increasingly necessary as more communities look to take advantage.
A community land trust is a form of community-led housing, set up and run by ordinary people to develop and manage homes and other assets like community enterprises, social facilities or workspaces.
An ‘asset lock’ created by provisions in trust constitutions ensures that any homes will remain affordable in perpetuity. Trusts take freehold ownership of the land and can partner with housing associations, which are responsible for securing the funding, building the homes and managing the schemes after completion under a long-term lease.
As with any development, the trust must work with the local council to create the homes. Whether directly or through the partner housing association, this can help to build stronger ties between council and community in a way that a normal housing project can’t.
Some councils have even supported them with grant funding to kickstart the schemes or donated free land. At a time when there is significant pressure to build more housing, these schemes let councils show how they are working closely with communities to help bring new homes to market.
The National Audit Office recently estimated that housing targets would be missed by half of England’s local authorities. Whether it’s budgetary constraints or difficulties in negotiating with builders, councils across the UK are struggling to stimulate housing development in their regions.
Looking at affordable housing specifically, the situation is just as troubling, if not more so. A report from the Green Party estimated that London boroughs failed to create a planned 33,000 homes in 2018. At the other end of the country, a BBC investigation calculated that the north west is creating fewer than a third of the affordable homes the region needs.
The consequence of this is mounting pressure on local authorities to do their bit to stimulate development.
Removing the cap on how much local councils can borrow to fund housing projects is a good start and should let authorities use their enhanced buying power to fuel local development. But it doesn’t address all the complexities associated with creating housing, and community land trusts will be another important part of the solutions needed.
A relevant challenge for councils is unlocking small parcels of land for development. While vital for local housing needs, they often aren’t big enough to be a financially viable prospect for many established housebuilders and, as a result, are left undeveloped. These seemingly small missed opportunities add up to thousands of homes across the country that don’t get built.
Community land trusts can solve this issue. They are led by the community, so are often better at overcoming local objections, helping to get projects off the ground where traditional development might struggle. As the schemes have the interests of the community managing them at their heart, the housing is more likely to suit the needs of local people too.
Local authorities are in a challenging position. Yes, the government has recently made moves to support an increase in affordable housing provision, but that comes with a heightened expectation for councils to deliver. The pressure is on to boost delivery rates and prioritise developments that are sustainable and affordable.
Bjorn Howard, chief executive, Aster Group