A group of young people working in the not-for-profit sector in Oxford have set up a housing co-op with external investors to acquire their first home.
Tired of renting from private landlords, the five friends decided to develop an alternative housing model that would enable them to afford a house. Together they registered the Kindling Housing Co-operative, the city’s first housing co-op in 15 years.
The housing situation in Oxford, which recently topped a list of least affordable cities in the UK, was the main motivation for establishing the co-op, says founding member Marleen Bovenmars.
“Because landlords don’t benefit from maintenance work or energy savings, many people in Oxford pay very high rents to live in houses – often badly maintained – from which they can be evicted at any time, because landlords decide to rent it to someone else,” she said.
All members of the co-op had been living in houses in multiple occupations. And while they enjoyed communal living, they were often disappointed with the state of the property and the failure of landlords to deal with maintenance problems.
“In the six years I have been in Oxford I have lived in five different houses and I feel like I have gathered enough crazy landlord stories for a lifetime,” said Ms Bovenmars.
“From a landlord that would knock on our door to ask for an advance on our rent to a boiler that would not be fixed for weeks in the middle of winter – I know that many others have to put up with similar stresses and this is what motivates me.”
From this situation, Kindling was born. “We wanted to develop a model that could be affordable, which could work here in Oxford and in other cities as well,” said Ms Bovenmars.
The six friends have already secured a mortgage from Triodos Bank for a six-bedroom house in Church Hill Road, a £550,000 property. They expect to be able to move into their new home in September. The members will be paying around £400 in rent to the co-op, which will be the owner of the property.
“Gathering the investors was easier than expected,” said Ms Bovenmars. “People really liked the idea of getting a much better interest rate than they were with their money in a savings account, and contributing to a positive movement at the same time.”
Overall they managed to attract 14 investors, who contributed £271,000 to the co-op. They included friends, family, colleagues and supporters reached through word of mouth.
“As the interest rates are at such an historical low, it is an attractive investment option for people with a minimum of £5,000 in savings that they don’t need for the next five years or more,” added Ms Bovenmars.
“Investors put money into the co-op like in a fixed bond savings account. They can choose the time period of their investment – five, 10, 20, 25 years – and also their own interest rate, up to 3%.
“At the end of the time period they get back their invested money plus the interest.”
To make the financial model work, the group looked at houses with a price of £75,000 per room. To achieve this, the members of the co-op plan to create more rooms by changing spaces such as the garage into bedrooms.
Now, Ms Bovenmars hopes the model can he replicated elsewhere in the country.
“We hope that if we can make it work here in Oxford, the least affordable city in the UK, it can work in other places. We want to fuel a housing revolution, one co-op at a time, so our motivation is to inspire others to do the same.
“It’s about being able to make a house your home and creating an attractive alternative to the private renting sector. It can also work for families. We are now very keen to share our experience and knowledge with other groups.
“Once a co-op buys a house it can only ever be sold to another co-op. So starting co-ops means taking houses out of the market to ensure affordable rents and good housing conditions into the future.
“We really want to make our house our home and we will work to ensure it is energy-efficient.”