Brick by brick: new housing federation for student co-ops

Students looking for co-operative solutions to a national shortage of affordable accommodation are hoping to set up a national network, offering thousands of young people new hope. Students for...

Students looking for co-operative solutions to a national shortage of affordable accommodation are hoping to set up a national network, offering thousands of young people new hope.

Students for Co-operation, a federation of student co-operatives from across the UK, has already established housing co-operatives in several cities including Edinburgh, Sheffield and Birmingham. Around 120 students are involved in these initiatives, which have proved to be more cost-effective than university halls of residence or the privately rented sector.

Now it hopes to set up a UK-wide co-operative housing framework for students currently facing cripplingly high rents and low standards of accommodation.

Their plans follow positive news from a 48-page report by Acorn Co-operative Support, which looked at the feasibility of setting up a National Body of Student Housing Co-operatives which would enable their quick growth across the UK. The report was funded by East of England Co-operative, and created in consultation with existing student co-operatives, prospective co-operative groups, housing co-operative support organisations, supportive organisers and potential lending partners.

Under the initiative, the National Body of Student Housing Co-operatives would be formed as a secondary co-operative made up of student housing co-ops.

With the help of a separate community benefit society, it would access finance to purchase property freeholds and acquire properties, attract equity from existing co-operatives and support from experienced co-operators who would sit on its advisory board. Delegates from the student co-operatives would also sit on the management committee as part of the project.

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Sean Farmelo, of Students for Co-operation, helped set up a housing co-operative in Birmingham and is one of the key people involved in the plans.

There are a lot of bad landlords and a lot of problems. Temporary residents such as students get tricked out of a lot of money

“The new approach recommended in the report is designed to make it easier for housing co-ops to be started wherever there are students keen to see it through,” he says.

“We set up a co-operative in Birmingham in 2012 and realised we needed to create a national network as so many people were interested. There is a real need out there.

“At the moment students are housed in halls for their first year, but it is rare to find this type of accommodation for under £100 a week. If it is close to London it can be more than that. The situation is not much better in the privately rented sector.”

In Birmingham, one of the prime student areas is Sellyoak, which has seen rent prices increase to take advantage, says Mr Farmelo. “When we have gone round door-knocking we have come across places where they charge around eighty to ninety pounds a week for small houses with bad fixtures and fittings. There are a lot of bad landlords and a lot of problems. Temporary residents like students really get tricked out of lot of money.

Birmingham Student Housing Co-op's Pershore Road property
Birmingham Student Housing Co-op’s Pershore Road property

 

“A lot of people would be surprised at the stuff we have to put up with, such as huge admin fees and deposits. Landlords think they can get away with pretty much anything and are taking huge liberties.”

As Mr Farmelo explains, attempting to set up a student housing co-operative had several challenges, which meant they had to look for a new way of doing things.

“We spent a lot of time trying to work out if we could get mortgages and loans from co-operatives so we could purchase a house. The normal co-op lenders were not willing to lend us money, but in the end we found a co-op which would back us.”

The Phone Co-op acquired the property on Pershore Road on their behalf in 2014, through its Co-operative and Social Economy Development Fund, and Birmingham Student Housing Co-operative is buying it back over time.

“We get management support from a local housing provider and rents are about £59 a week, which is £20 cheaper than anywhere else.” adds Mr Farmelo. “It works well but it was a very difficult process and we decided it was not an off-the-shelf model we would like to repeat because our pockets are not enormously deep and it was not the most appropriate or sensible way of doing things.

The Birmingham student co-op has been providing accommodation since 2014
The Birmingham student co-op has been providing accommodation since 2014

“We needed a viable national body which people could invest in as they would in something like community energy and which banks would also see as a reasonable investment.”

Under the proposals for the national body, acquiring properties would allow the network to build up the capital needed to buy larger ones and expand to different cities where there are groups of students keen to set up housing co-ops to change their local housing conditions.

The feasibility study, which has inspired the plans, identified key problems facing the creation of new student housing co-operatives.

They included limited access to finance and a lack of experience in business management, property purchasing and running a co-operative. Other issues raised included no specific rules for student housing co-operatives and no co-operative-specific student tenancy agreements. But the feedback has been positive and Mr Farmelo is optimistic about the prospects after speaking to key stakeholders like the Unity Trust Bank and East of England Society.

“The report is very extensive,” he says. “We have found a legal model that works. It looks like we would be starting off with properties in cheaper cities such as Nottingham or Norwich. As time goes on we would invest in more property.

“The stage we are at is finding the seeding money to set up the national organisation – we need to raise £15,000 to £20,000, so there are lots of ongoing applications to funding bodies and that we are waiting to hear back from.”

The initial funding will cover the legal work associated with drafting new lease and tenancy agreements and creating the rules for the business. It will also cover the costs of a network co-ordinator to support the existing and prospective co-operatives involved who will be looking at houses to purchase.

Mr Farmelo adds: “This grant funding could also enable us to access over £1m of investment in the planned first round of house purchasing which lenders have indicated would be available given the strengths of our plans. There are 120 of us at the moment and other people in groups that do not have houses yet. If we can show there is a way forward we will galvanise a lot more people.”

The organisation hopes to be buying the first couple of houses in 12 months time, depending on finance.

“It is a matter of getting the thing going and making sure that the co-op movement sees a real opportunity for getting people involved and educated,” he says.

“We are actively trying to promote the plan and get as many on board as possible. It is an ambitious project that could be a big success story with thousands of young people learning about co-operatives and how they work – as well as living in them.”

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