Click on the links below to see the answers to Frequently Asked Questions:
Community Land Trusts
No you can’t as when you sign to agree to be a member it says that you agree with the aims of the CLT.
The CLT is a Community Benefit Society, an incorporated organisation registered with the Financial Conduct Authority. Community Benefit Societies – as their name suggests – are set up for the benefit of the community (however the community is defined). It is a non-for-private-profit organisation where any land or property is held for the benefit of the community and can never be sold for private profit. People living in the community can become members for £1. The members elect the Board and one third of the Board members stand for re-election at a time. A Community Benefit Society can own land for affordable housing but can also own other land and property of importance to the community, such as a village shop, pub or renewable energy scheme.
This is because Companies House is not the regulator of Community Benefit Societies, which are registered with the Financial Conduct Authority.
Housing Associations are social enterprises whose purpose is to provide affordable housing. Those used to working with CLTs recognise that local people are best placed to lead a project, while they are experienced at taking the risks of development, providing finance and managing the homes. They also recognise that to be most advantageous to the local community, the CLT should retain the land, lead on the design and agree the criteria for who will live in the homes. In addition, the housing association will pay a ground rent to the CLT which will be used for other projects across the Group Parish area.
Some Housing Associations are interested and experienced in working with Community Land Trusts; others aren’t. Our adviser – the Wessex CLT Project – has worked with 4 Housing Associations on over 20 CLT projects over the past 8 years and 2 more Housing Associations are thought to be interested. There is a formal selection process involving an objective evaluation and the Housing Association is selected which best suits the objectives of the CLT.
There was an invitation sent to four housing association, two didn’t reply and two did, after that several board members went around and looked at the projects completed by both companies and spoke to residents, then both companies were invited to an interview with the board. It was then decided by the board to go with Teign Housing.
This doesn’t apply to housing association tenancies in small, rural parishes. There is also clauses in the lease between the CLT and Housing Association to say that they can’t be sold under the new right to buy.
Funding and Grants
Grants are available to the CLT to fund a planning application (including the cost of employing an architects, surveyor, engineer etc.) and the Trust’s legal costs. Capital costs, including the purchase of the land and the development of the homes, are met by the CLT’s housing association partner. The land is paid for when a lease agreement is entered into by the landowner and housing association; the freehold ownership then passes to the CLT for £1.00. The housing association will bear the risks of development (such as contractor insolvency) and long-term management of the site.
The CLT’s housing association partner pays for the land by entering into a long-term lease with the landowner; the landowner then transfers the freehold to the CLT for £1. This means that, without having to fund-raise, the CLT becomes the freeholder; in other words the ‘landlord’ to the housing association’s ‘tenant’. These transactions are formalised in an Option Agreement which is signed by the CLT, HA and landowner before a planning application is submitted.
Affordability & Rent
Devon Communities Together.
If the Community Land Trust builds on an exception site (i.e. a site adjacent to the community’s settlement boundary where housing development would not normally be permitted), then a legally binding planning agreement (known as a Section 106 Agreement) is that the homes must be prioritised for local people. It is only on this condition that planning permission would be granted and of course this accords completely with the CLT’s ethos. As the freeholder, the CLT would be party to this legal binding planning agreement and this means that it could not be changed without the CLT’s consent. If the homes are built within the settlement boundary, the CLT would require a similarly binding planning agreement to be put in place. The CLT also works with its HA-partner and North Somerset Council to put an allocations plan in place which details the criteria by which people are deemed to have a local connection i.e. the minimum length of time they should have lived or worked in the village, or had family connections here.
Planning permission for affordable homes on land such as this is subject to a special planning condition – known as a Section 106 Agreement – which restricts occupancy to people with a local connection. In addition, ownership of the land remains with the CLT, who will enter into a lease agreement with a housing association under a 125-year lease. Both ensure that the homes are available and affordable to local people in perpetuity and act as barriers to the government’s new Right to Buy for HA tenants.
Rent will be affordable at a local rate – usually 80% of the open market rate for similar properties, or the Local Housing Allowance (whichever is lower).
If the capital grant needed to subsidise the build cost comes from the Government’s Homes & Communities Agency, rents would be set at 80% of the market rent for properties of similar size or at the local housing allowance, whichever is the lower amount. If the grant comes from the community
(Rents in Dalwood are set at 80% of the market rent and are £102.37/week for a 1bed flat and £126.31/week for a 2bed house. These rents are paid over 48 weeks so the 52/week equivalent will be a little lower. The Local Housing Allowance for East Devon (i.e. the most payable through Housing Benefit) is £123.58/week for a 1bed flat and £153.02/week for a 2bed house so the actual rents are clearly much lower.)
Yes the rents would be set at the most affordable rents that the CLT can do after looking at which grants to apply for. The CLT will look at all options and find the most affordable rent they can.
In that case tenancies would be offered to those with a connection with the nearest neighbour Parish. CLTs do much to help to raise awareness of a project in the local community so there is usually no shortage of local people
applying for the homes.
No. This is because tenants cannot buy their homes under the Government’s new Right to Buy where there are legal barriers to prevent it. For CLTs, the legally binding planning agreement (known as a Section 106 Agreement) requires the homes to be affordable in perpetuity. In addition, the CLT’s long-term lease with its HA-partner would prevent the HA from ever selling homes under the Right to Buy without the CLT’s permission.
Yes they do and only the amount required to build the 6 houses will be sold.
£3000.00 per plot and £1000.00 for legal fees. The usual land value for an ‘exception site’ (where affordable homes can be built to meet a local need) is an uplift from agricultural value but is nowhere near the full residential value of a comparable site where a developer would be able to achieve planning. (Something that would not be possible on this site due to the Planning Policy restrictions of the rural AONB.)
The £3,000 per plot value was also considered appropriate by Northleigh Parish Council in order to assist the Community Land Trust in its case for the homes and, if the project succeeded, would result in a future investment to the community from the payment of an ongoing ground rent.
It goes to Northleigh Parish Council for them to put back in to the village in whichever way they see fit.
Having housing stock available for a diverse community is beneficial locally and does not devalue house prices. Homes affordable to local people help families to support each other and help local businesses to retain employees. In addition, CLT-led projects are small in scale and well designed – see other local examples such as Marshwood, Powerstock, Toller Porcorum etc.
This project is being taken forward under the Council’s policy for exception sites in rural areas and the Planners and Local Authority will need to consider its viability and grant or refuse planning permission based on the justification put forward by the community in the application.
As a community-led organisation, CLTs can apply for grants to carry out feasibility work and make planning applications. This grant is used by CLTs to appoint architects, surveyors, engineers, ecologists etc and to meet planning fees; all helping to ensure that the design of the homes has the community’s support.
This is based on the housing need survey completed by Devon Home Choice completed in 2014 and updated in July 2017 indicating that There are currently a total of 12 households on the Devon Home Choice register living or working in the three parishes. It should be noted that not all of these households may wish to continue to live in the three parishes or may not have the local connection. However, the numbers have increased from 7 in the 2014 survey which could be down to increased publicity and awareness of the affordable housing project. None of the above households is included in the 2014 survey figures so there are a possible 3 further households which are in housing need across the 3 parishes.
Northeligh PC have also requested that there is a covenant put in to say only 6 homes can be built, as this is all they have agreed to be built at the site.
Into a new local treatment plant.