By Owen Jarvis, Tom Chance, Blase Lambert
February 2025
The CLH Sector’s Long-Term Growth Strategy
Introduction
Since the summer of 2023, UK Cohousing Network has joined forces with the Community Land Trust Network and Confederation of Co-operative Housing, we have been discussing and developing a long-term strategy to scale up community led housing (CLH) with MHCLG. The sector is currently far smaller than in comparable countries, and there is a lack of institutional capacity and know-how to grow it.
The long-term strategy has three prongs:
1. Improve access to affordable finance, including public, private and social sources.
2. Grow the delivery capacity of a marketplace of intermediaries, including pre-development enablers creating community-industry partnership projects; specialist developers of CLH; and acquiring existing and newly completed homes in the market
3. Use policy reforms to maximise opportunities for CLH, including access to land.
Precursors to Homes England have had more significant support for CLH, such as the major capital investment in new co-operative housing from 1974 to 1988. In recent years Homes England has supported CLH in an almost incidental way – for example, we estimate CLH might comprise as much as 3% of the Affordable Homes Programme but not through a deliberate focus on bringing this pipeline in.
Precursors to Homes England have had more significant support for CLH, such as the major capital investment in new co-operative housing from 1974 to 1988. In recent years Homes England has supported CLH in an almost incidental way – for example, we estimate CLH might comprise as much as 3% of the Affordable Homes Programme but not through a deliberate focus on bringing this pipeline in.
In this note we set out how Homes England and the CLH sector could take a strategic approach to delivering its strategic plan through, and with, CLH.
Relevance to Homes England’s Current Strategic Plan
Community led housing (CLH) can make a unique and important contribution to Homes England’s current strategic plan for 2023-28. In particular, there is a strong evidence base of its ability to “support the creation of vibrant and successful places that people can be proud of” and “promote the creation of high-quality homes in well-designed places that reflect community priorities” by giving those communities agency in the process.
Homes England’s Strategic Plan talks of the agency “working more closely with a number of places, and in a more joined-up way”, and working “closely with local authorities, other government departments and the private sector as partners to deliver change”. But it does not.
consider how the agency can work more closely with communities. Placemaking is about social as well as physical infrastructure, and as seen in places like Northstowe if it isn’t provided it leads to poor quality places. Community led development and ownership of a range of assets including housing bakes social infrastructure into placemaking.
Homes England aims to “diversify and build capacity across the sector, including in master development and urban regeneration, to enable us to help regenerate more of our towns and cities”. However, the strategy has not considered how to build capacity in the community led housing sector to achieve these goals, and other corporate aims. In doing so, Homes England can build “a housing and regeneration sector that works for everyone, driving diversification, partnership working, and innovation”.
Relevance to Future Direction
In his letter to the Chair of Homes England in September 2024 the housing minister made diversification the fifth of his seven priorities for the agency, and included community led housing within this priority.
He also asked the agency to prioritise support for new towns and major schemes, where the minister would like to see more involvement for community led housing; and to prioritise social rent, which is the most common tenure developed by CLH currently.
Invest 2035 describes the government’s industrial strategy as a sustained collaboration to meet societal goals; providing a direction for growth, increasing business expectations about future growth areas and catalysing activity that otherwise would not happen; building institutional capacity; building structures and ways of working. This should frame Homes England’s approach to diversification and community led housing, and aligns with elements of our long-term strategy – to build the institutional capacity and ways of working with intermediaries; and to provide a clearer direction for growth with land and finance.
How Homes England Can Help Scale Community Led Housing:
Homes England is in a strong position to help scale up community led housing by using its existing powers and funding.
Improve access to finance
The lack of finance (and in particular risk capital for pre-development stages) and the cost of capital for smaller builders/providers are key barriers to growth of community led housing.
Homes England should:
- Seek and exercise flexibility within the Affordable Homes Programme around tenures (such as discount market sale or mutual homeownership) and grant rates (to reflect abnormal small/rural site costs and additional assets like common houses);
- Encourage Strategic Partners to partner with community led projects, particularly where there are well established pipelines supported by skilled intermediaries such as in some rural regions.
- Invest capital (loans/equity) in CLH intermediaries to scale up their activity;
Grow delivery capacity
Owing in part to the risky market and policy churn, there is not an effective body of expertise and capability to develop community-led housing in the UK, as exists in other European countries.
Homes England should:
- Support and finance the CLH Growth Lab to bring forward intermediaries with scalable business models that Homes England can then invest in, and help broker partnerships with the private and public sector to develop and grow these social businesses.
- Include CLH intermediaries and sector stakeholders in partnership working at a regional and local level, to build the cross-sector ways of working between communities and the public and private sectors.
Maximise opportunities
The land and planning system today operate as a significant barrier for diversification of housebuilding, affecting community led providers particularly acutely.
Homes England should:
- Explore, as a matter of course, opportunities for community led housing (and self/custom build and SMEs) when disposing of land, enabling land to come to the market and when acting as a master developer. This should include community stewardship of public space and amenities, where it won’t be adopted by a local authority, and opportunities for community led housing organisations to build homes, codesign and develop in partnership with others, or acquire homes and other assets within these sites.
- When creating and supporting partnership approaches locally with local/combined authorities and the private sector, include CLH intermediaries and other stakeholders in these partnerships, and broker new opportunities for CLH through these.
Conclusion:
A significantly larger community led housing sector could help Homes England deliver its current strategic plan, and meet the new government’s priorities for the agency. We have set out seven ways in which Homes England could use its existing powers and funds to do this. These align with our proposals to the government for its 10 year housing plan, and could see Homes England driving genuine market diversification and partnership working, creating more high quality homes and well designed places.