See our  Briefing Sheet on Affordability, below

Photo: Andy Lord



There is a crisis in affordable housing in this country. House prices are still much higher than average earnings. In 2010 the house price to income ratio in the UK was 4.44 (average annual earnings £57,996 and average house prices £251,634)[1].


LILAC is responding to this situation through adopting a ‘mutual home ownership scheme’ (MHOS). An MHOS is a new way of owning a stake in the housing market. It is designed to bring the bottom rung of the property ladder back within reach of households on modest incomes in areas where they are priced out of the housing market. It is designed to remain permanently affordable for future generations. Members of the society are the residents who live in the homes it provides. The society and not the individuals obtain the mortgage and so borrowing is cheaper.


How does it work?

Each member has a lease which gives them the right to democratically control the housing community they live in. Under the terms of the lease, members pay an equity share to the co-operative and retain equity in the scheme. After deductions for maintenance, insurance etc, these payments pay the mortgage. The payment that leaseholders pay each month and the number of equity shares they hold depends on how much they earn. Monthly payments are set at around 35% of net income.


As members leave, existing members can buy more equity shares, and as people’s income levels change their equity share commitments can also change. If someone leaves sooner than three years then they will not be entitled to increases in the value of their equity shares. The company keeps a set percentage of any increase in equity to ensure the sustainability of the project.




For more information read - What is a MHOS? in FAQs.



Photo: Andy Lord (
lilac briefing sheet affordability THUMBNAIL

[1] Communities and Local Givernment, Live Tables on Housing Market and House Prices, Table 513, cited in House of Commons Library, ‘Regional House Prices: affordability and income ratios’ 29 May 2012



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