Fed up with rising rents and unaffordable housing, a group of Oxford locals are buying a six-bed house together, financed by loans from investors keen for both a high rate of return and a new vision for affordable housing.
The Kindling Housing Co‐operative started out as a conversation between friends 18 months ago when locals expressed concern that neighbours were priced out from buying a first home in the areas they lived in. Inspired by a model of cooperative housing, the group set about forming their own legal entity – a housing cooperative – through which to buy their first house and have more control over their housing.
This year Oxford in England topped the list of least affordable cities in the UK with house prices hitting a staggering 16 times the average annual salary earned in the city. Members of the Kindling Coop, who are all currently renting in Oxford suburbs, say rents are increasing at an unsustainable rate where comparatively salaries stand still.
Coop member Hannah Smith (33), a project manager from East Oxford, said: “The agent I rent through is increasing our rent by £150 per month this year, so I’m forced to look elsewhere after being happy in East Oxford for three years. While rents are rising and house prices in the area shoot up month by month, the coop model seems like a way forward for the many people unable to afford to buy here and take control of our housing and rent prices.”
The cooperative (or coop) model raises finance by securing loans from anyone keen to invest £5,000 upwards. The investors won’t own the house, but will profit from a good loan return. Kindling Coop members have launched a crowdfunder to help them reach their financial goals this month, welcoming support for fair and affordable housing through both crowdfund donations and investment. You can visit their website for more information, contact details and the investors pack.
Based on their business plan the investment loans are paid back through the rent each coop member will pay once they’ve moved in to the house. With enough investments to have secured a deposit, a mortgage is enabling the group to buy a six-bedroom house in Cowley, Oxford, but in order to make the rent affordable for local incomes the group is raising half of the total house cost from private investors, which will mean a smaller mortgage, lower return rate and therefore lower rents. Once purchased, the property will not return to the open market, which the Kindling Coop members say will provide affordable housing for local people for as long as the house is standing. Kindling Coop members say the purchase in Oxford will be a landmark victory for housing cooperatives due to the perceived challenges for housing cooperatives in the expensive South East of England.
Andy Edwards (31), a member of the group who works for a local non‐profit design company, said, “Because landlords don’t benefit from maintenance work or energy savings, many rented houses in Oxford are in a bad state. We will work to ensure that our house will be energy efficient and comfortable. We won’t ever sell the house, so the cooperative will be effectively taken off the market for the benefit of fair rents and good housing conditions for local people who want to stay living here.”
“Through my work for Oxford Tenants Union, I have learned how many people struggle with insecure housing whilst paying high rents”, said Miranda Shaw (31), an Oxford‐born music teacher. We are not just looking to secure a home for ourselves, we are already sharing our learning with others and hoping there’s momentum for many more housing coops providing alternative ways for fair house prices and fair rents longer term.”