What is an Ecovillage?

What is Co housing?

What is an MHOS (Mutual Home Ownership Scheme)?

How can I get involved?

What commitment do I need to give?

Do you have an ethical policy?

Is the project affordable for me?.

What is an Ecovillage?

Ecovillages are urban or rural communities of people, who strive to integrate a supportive social environment with a low-impact way of life. To achieve this, they integrate various aspects of ecological design, permaculture, ecological building, green production, alternative energy, community building practices, and much more.

What is Co housing?

Cohousing is a way of living which brings individuals and families together in groups to share common aims and activities while also enjoying their own self-contained accommodation and personal space. The main features are that they are run by their members, committed to living as a community, designed to encourage social contact and include common space. Co-housing balances people's need for privacy with their desire to live in a more community-focussed way.

More information in the What Is Cohousing slide show.

 

What is an MHOS (Mutual Home Ownership Scheme)?

 

Instead of residents owning an individual property, the homes and land are owned by a Mutual Home Ownership Society (MHOS).

The MHOS is registered as a co-operative controlled by its members. Its members are the residents who live in the homes it provides. Each member or group of members has  lease which gives the right to occupy a specified house or flat owned by the MHOS.

 

Members of the MHOS have been involved in the build and design of their homes, and democratically control the housing community in which they live.

 

The cost of building the homes owned by the MHOS, has been financed by a mortgage loan from Triodos, the charity bank.

 

Under the terms of their lease, each member makes monthly payments to the MHOS which pays the interest and capital to the bank, and covers a deduction for management, maintenance, insurance and service costs (such as cleaning, lighting of common parts, and grounds maintenance)

 

The cost of buying the land and building the homes owned by the MHOS and financed by the mortgage is divided into EQUITY SHARES. Each equity share, which has a face value of £1 on the date on which it is issued, is owned by a member and financed by the payments members make each month.

 

The number of shares owned by each member depends on what they can afford and the build cost of their home. The more they earn the more equity shares they can afford to finance.

As their income rises they can buy more equity shares.

If their income falls, rather than lose their home, they can sell equity shares if there is a willing buyer or, in specified circumstances such as loss of employment or disability, convert to a standard rental tenancy.

To ensure sustainability of the project the value of the equity shares owned by a household must not differ more then + or – 10% of the build cost.

If affordable payments (set at around 35% of net income) are above the amount required to finance equity shares of the value of the build cost + 10% the remainder will go into the contingency and future fund called the Lilac Equity Fund. Contributions to the LEF are capped at 1.5% of the total share allocation.

 

The MHOS is controlled by its members who live in the homes it owns. They elect the Board of Directors which controls the day to day management of the MHOS within the remit set by members in general meeting.

If a member moves out and sell their shares before they have lived in the MHOS for three years they will only be able to sell them at their original value (or a lower value if their value, calculated in accordance with the valuation formula, has fallen).

 

For members who leave after three years the value of the equity shares will principally be driven by references to increases (or decreases) in national average eearnings. Exiting members will get the value of their original shares plus interest at 75% of the increase (or decrease) in average income. The MHOS retains the other 25% of the increase (or decrease) to fund the replacement of kitchens, solar panels etc as and when required. 

 

Like any other person taking on a loan and repayment obligation the MHOS will need to carry out a credit check and personal financial assessment to ensure that potential members are able to repay the mortgage debt servicing obligations they are taking on. The MHOS also requires members to have advice from an independent financial advisor to ensure that they understand the financial obligations and risks they are taking on.

 

The initial lease is granted for a fixed term of 20 years. This gives members a legal interest in their home and the equity shares they own that can be registered with the Land Registry. Longer leases are not possible as a longer fixed term lease would mean members would be able to buy the home and the land it is built on outright (this is called leasehold enfranchisement). That would mean that it will go into the open market and not be affordable for future generations. This would defeat a key purpose of setting up this MHOS scheme which, as well as giving members an affordable investment in the housing market, is to ensure that the homes in it remain affordable for future generations.

 

The lease gives members the right to remain in their homes after the initial 20 year term for as long as they want to do so. The right of occupation granted by the lease is legally secure under the terms of the lease contract and cannot be ended other than through a breach of the lease by the member or by a failure of your Mutual Home Ownership Society to meet its obligations to pay its mortgage. Ultimately, if the Mutual Home Ownership Society fails to meet its financial obligations there is a risk that members may lose their home.

 

The finances of the MHOS are structured to maintain reserves to avoid any risk of repayment default. A financial intermediary, the Co-operative Housing Finance Society Ltd (CHFS), will provide the bank and any other long term investors with a 12 month interest guarantee as security against default. CHFS has been in operation since 1997 and has a track record of monitoring default risk.

 

Members can move between properties in the scheme as they become available and as their housing needs change as long as all the equity shares can be financed by incoming members.

 

Under the terms of the lease members are responsible for all internal and non structural repairs including any heating appliances, kitchens, bathrooms and other services inside your home The MHOS will be responsible for structural repairs and for the maintenance of the exterior of the houses.

 

Members will need to pay a minimum deposit equal to 10% of the equity shares they can afford to finance through their monthly payments. It is important that members make a positive personal financial commitment to become a part of the MHOS.

 

It is affordable because:

 

• ‘rental’ charges are geared to 35% of net household income

 

• members secure a ‘foothold’ on the housing ladder at lower household incomes

 

• members can buy more shares as their income rises

 

• transaction costs on buying into and leaving are reduced because homes are not bought and sold

 

• the linkage - to average earnings - helps reduce risk and retain affordability

 

• it remains affordable from one generation of occupants to the next

 

It is sustainable because:

 

• the housing remains permanently affordable for the benefit of the local community

 

• the benefits are recycled from one generation of occupants to the next

 

• it is easier to finance environmentally sustainable housing

 

• it encourages active citizenship and community engagement on multiple levels

 


How can I get involved?

There are two ways to get involved:

You can become a FRIEND of LILAC to be put on our mailing list for upcoming socials and news.

You can apply to be a MEMBER of LILAC if you would like to live in the neighbourhood. Applications will be considered by the current members and we will provide you with a short form. Please contact our membership officer for more details. When we are full, those wishing to be members will be placed on a waiting list.

See Contact membership

What commitment do I need to give?

We ask all members to be an active participant in our community, joining a task team, participating in shared work days and meetings, and keeping up to date with emails and notices. 


Do you have an ethical policy?

Our ethical policy can be found here.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Lilac is a Mutual Home Ownership Society (No. 30689R)