Home‎ > ‎Full Report‎ > ‎Strategies‎ > ‎

Faith in Affordable Housing

Various factors contribute to the shortage of affordable housing:

· The escalation of house prices compared with incomes has priced many first time buyers out of the market and hugely increased the cost of renting.

· The housing stock profile in some areas is biased towards semi-detached and detached properties with much more limited availability of smaller and cheaper properties such as terraced houses or flats suiting single people and those on lower incomes.

· The Right-to-Buy introduced in the 1980s shrank the pool of rented accommodation.

· The increase in second home ownership and holiday lets in rural areas and the settlement of ‘in-comers’ such as commuters and retired people has made it difficult for local young people to remain. This problem is exacerbated where people employed locally are on relatively low incomes.

Affordable housing includes social rented and intermediate housing[1] provided to specified eligible households whose needs are not met by the market. Affordable housing should:

· meet the needs of eligible households including availability at a cost low enough for them to afford, determined with regard to local incomes and local house prices; and

· include provisions for the home to be retained for future eligible households; or, if these restrictions are lifted, for any subsidy to be recycled for alternative affordable housing provision. (CLG Planning Policy Statement 3, re-issued June 2011 )

Faith in Affordable Housing

Churches cannot solve the housing problem, but they can make a significant contribution by developing underused or redundant assets such as glebe land and property. Faith in Affordable Housing is a free web-based guide giving practical and technical information to help churches offer their land or property for affordable housing. (http://www.fiah.org.uk/) Converting church buildings into affordable housing not only gives the opportunity to provide a much needed resource for the local community, but also brings in an often urgently needed revenue stream to the church. Faith in Affordable Housing also has a Project Co-ordinator who works on a no-fee basis with churches that are considering affordable housing, to assist with getting projects up and running and has details of case studies of existing church initiatives. The project is managed by Housing Justice, a national charity that works with churches of all denominations to prevent homelessness and bad housing.

For churches to make provision for affordable housing by unlocking church land or property requires them to strike a balance between meeting social objectives and complying with charity law and maximising investment returns. A letter from the Charity Commission to the Diocesan Property Secretary of the Diocese of Salisbury in 2008 demonstrated that this is possible:

“If a disposal is being made in furtherance of a charity’s purposes, the s.36 (9) of the Charities Act 1993 permits it to be made at less than the best price reasonably obtainable. It is also the case that many people would understand that part of the doctrine of Christianity is the assistance of poor and needy people and therefore activities towards those ends could be seen as a means of advancing Christianity.”[2]

Faith in Affordable Housing – Using church land and property for affordable housing: A Practical Guide (February 2009) provides guidance and gives different denominational examples of ways in which churches have been able to reconcile these objectives.

Examples of diocesan approaches: 1. Exeter Diocese

After a review of diocesan assets, Exeter Diocese formed a partnership to address the problem of large ‘time-expired’ church buildings as well as high community need for affordable housing. ‘Time-expired’ indicated that the buildings were not fit for purpose and were also beyond economic repair/remodelling. They were, therefore, dragging down the mission of the local church rather than being able to be used as an effective resource for the church and community. The Diocese also drew up a Partnering Charter with the vision of producing “useable, affordable and deliverable solutions for suitable former Church sites to meet the needs of stakeholders”. One of the partners, Sarsen Housing Association reviewed ten underused, closed or derelict churches in Plymouth, which the diocese considered worth redeveloping into affordable housing, usually with new ‘fit-for-purpose’ places of worship and community facilities. Most of the churches developed have been in low land value locations. The deal between the diocese and Sarsen involved exchanging old churches on a 125 year lease for newer, purpose-designed smaller ones with space that can be rented out for community activities. Since 2003, 154 homes have been built as a direct result of this partnership with Sarsen. Schemes include:

· St Paul’s Church in Efford was completed in 2007. Efford ward was ranked as the seventh most deprived neighbourhood out of 43 in Plymouth and third most deprived in terms of housing. The project, using the old 1960s church site, provided a 40-flat Extra Care scheme for older people at affordable rents. There is round the clock care and support as well as communal facilities and gardens. A new library was built into the Extra Care building and the old library site used for the new church.

· St Barnabas Extra Care home opened in 2005. The scheme comprised 32 one and two-bedroom flats for frail elderly people, with on-site care staff. The money the diocese received for the scheme funded the conversion of the church hall into a new worship area. Part of the hall was leased as a doctor’s surgery.

· A property in Cumberland Street, Devonport, which already provided the base for a long term community project on the ground floor, was bought from the Diocese by Sarsen, and its upper floors were converted and let as two affordable flats completed in 2007.

· St Michael’s Church, Devonport was falling into disrepair and becoming a financial millstone. The diocese leased the land on which the church stood with the neighbouring vicarage to Sarsen Housing Association in return for a new church on the same site and funds to acquire a vicarage elsewhere.

· St Chad’s Whitleigh Green was a 1950s church. Sarsen leased the land from the diocese to provide 5 houses for rent, 33 two bedroomed flats – 10 shared ownership and 23 for rent – that opened, together with the new church, in October 2010.

Examples of diocesan approaches: Salisbury Diocese

Salisbury Diocese has been selling or leasing land for affordable housing since the early 1990s. During the 1990s, there were six schemes totalling 52 houses.

One of these was a Train and Build scheme in Bridport, a small market town in Dorset. Bridport had a high incidence of single homeless people who had poor employment prospects and there was a net out-migration of young people. The diocese leased part of the rectory garden to Bournemouth Churches Housing Association for 99 years for the development of eight one-bedroomed flats for local unemployed and homeless 18-24 year olds. The potential occupants helped with the construction supervised by the building contractor and, at the same, time attended college and completed NVQs in their chosen building trade.

Thus the lease of a surplus rectory garden provided a release of capital for the diocese but also a range of other benefits:


· Local employment for the young people involved and local people employed by the contractor.
· Formal training for individuals that enhanced their life chances.
· An affordable rent for the individuals concerned.
· Better economic prospects for the local community.


· Much needed social housing.
· Help to stem the out-migration of young people in search of work/training.
· Bolstered self-esteem of the young people involved.
· Help towards cementing community relations and social cohesion.


· It showed that all the parties involved, including the church, were committed to the idea of alleviating the basic problems that affect rural communities.

A local scheme: Keswick Community Housing Trust – St John’s Housing Scheme

The following is an example of a local scheme using a Community Land Trust (CLT). A CLT is a non-profit, community-based organisation run by volunteers that develops housing or other assets at permanently affordable levels for long-term community benefit. It does this through local ownership and control, reducing the value of the land that the homes are built on and, in the case of shared-equity homes, fixing the resale percentage, thereby enabling occupiers to pay for the use of buildings and services at prices they can afford. The value of land, subsidies, planning gain and other equity benefits are permanently locked in by the CLT who holds the asset in trust for long-term community benefit. http://www.communitylandtrusts.org.uk/

In early 2009, Keswick Churches Together conducted a series of ‘exploring our communities’ consultations. A key emerging message was the lack of suitable affordable housing because of the combined effects of high house prices and second homes, low wages in an economy dominated by tourism, the loss of affordable housing through the Right to Buy and the high cost of shared ownership. As a result, a community-led organisation, Keswick Community Housing Trust (KCHT), began meeting in November 2009 and became incorporated in December 2010. Its plan is to develop an 11-unit housing scheme on a section of St John’s Church graveyard.

Also in 2009, a Community Land Trust (CLT) post for Cumbria was created with the officer, Andy Lloyd, based at Cumbria Rural Housing Trust. KCHT have been able to access his support and expertise. The steering group comprised church members, town councillors, a long established local builder and people in housing need. Further research into need was undertaken and the plan builds on the findings of the 2002 Keswick Area Action Plan and the 2007 Allerdale Borough Council Keswick Housing Market Action Plan.

The Trust was established as an Industrial Provident Society with exempt charitable status. This conforms to the definition of a CLT in the Section 79 of the Housing Regeneration Act 2008. Its objects are:

“to carry on for the benefit of the local community of the specified area of Keswick the business of acquiring, holding, developing and leasing land and property for permanently affordable housing and asset based community development and the business of securing the maintenance, improvement and creation of :

· Amenities for the local community; and

· The well-being of those who live and work, or want to live and work, in the local community; and

· To enable people to build thriving, inclusive communities through the democratic ownership and stewardship of land and other assets.”

In delivering its objects, it must seek to acquire and retain interests in land and property within the area of the local community and to manage such ownership actively to:

· Retain asset value for the benefit of the local community and ensure that the assets are not sold or developed except in a manner which the Society’s members thinks benefits the local community;

· Maximise asset value for the benefit of the local community; and

· Recycle any gains made in dealing with the assets for the benefit of the local community.

There are a number of necessary allies in the scheme:

· St John’s Church, which made the site available and facilitating discussions with the Diocese.

· Keswick Town Council, which has provided a small grant towards set-up costs.

· Allerdale Borough Council, which supports LCHT’s inclusion as a potential bidder for housing grant in the Local Investment Plan and is advising on planning and building regulations, allocation policy, linking with the Homes and Communities Agency and support funding.

· Lake District National Park Authority, which is promoting CLT schemes and has given a small grant for set-up costs.

· Derwent and Solway Housing Association, which is providing background advice, including the selection of architects and employer’s agent and housing management.

· Homes and Communities Agency, which is also providing background support and advice and specific advice about the new housing grant prospectus terms and conditions including the bids to the Community Right to Build Fund.

· Cumbria Rural Housing Trust giving support through its CLT officer, who has provided specialist workshops, advice and introductions, and help in developing the business plan.

· Hands-on-Help for Communities’ consultant provided the initial link to the CLT Fund and National CLT Network, produced the business plan template jointly with the CLT officer and advised on key stages of the project.

· Cobbetts – housing specialist solicitors that set up the Trust as an Industrial Provident Society and advised on raising local investment through a bond issue.

· The Tudor Trust, which manages the Technical Assistance Fund of the CLT Fund.

In addition, Keswick Quakers, Borrowdale with Grange Parochial Church Council and Keswick Methodist Church have given financial support.

The CLT approach offers the advantages of:

· Creating strong support for affordable housing within the community.
· Bringing land forward, which may not otherwise come forward – in this case gaining the agreement of the local diocese to sell land to the Trust.
· Ensuring that housing allocations meet local need and that policies are fair and transparent.
· Ensuring perpetuity - where the properties are owned by the community for the long term benefit of local people.

The KCHT scheme is for 11 x 3-bedroom homes:

· 4 rented homes @ 66% of market rent;
· 2 part ownership homes for sale @ 35% of market value;
· 1 part ownership home for sale @ 44% of market value;
· 4 Local Occupancy homes for sale @ 80 to 90% of market value.

The proposed funding sequence for the scheme is:

Step 1: A community share issue and donations to raise the money for the site and go towards initial costs.

Step 2: Development finance to build the scheme – potential combinations of:

· National CLT Fund.
· Social and commercial lenders.
· HCA or charitable grant.
· Construction company investment – where a company invests to generate work and is repaid on completion.
· Where local authorities agree to plough back New Homes Bonus into schemes that generate it (grant equivalent to council tax per home, additional for affordable homes).
· Other charitable grants.

Step 3: Most of the borrowing is repaid through sales of Local Occupancy and part ownership homes leaving a residual mortgage serviced by the rented homes.

The headings of the KCHT business plan are shown below, giving an indication of the topics that need to be covered in developing such a plan.

1. Introduction
2. Community Led Development
3. Keswick Community Housing Trust
4. Stakeholder Support
5. Sustainability Statement
6. Market Background & Housing Need
7. Planning & Funding Context
8. Other Housing Providers
9. The Added Value of CLTs
10. Development Site Details
11. Site Design
12. Scheme Delivery
13. The Scheme & Financial Projections
14. Operational Plan
15. Risk Analysis
16. Perpetuity & Leasehold Enfranchisement


I. Ground Investigation Report
II. Financial Tables – Income, expenditure, housing costs
III. Keswick Town Council Letter of Support
IV. Land Valuation
V. LDNP Policy CS18

[1] Intermediate affordable housing is housing at prices and rents above those of social rent but below market price or rents. These can include shared equity and other low cost homes for sales, and intermediate rent.

[2] Appendix I of Faith in Affordable Housing – Using church land and property for affordable housing: A Practical Guide (February 2009) gives the full text of the letter.