ChaCo is currently looking for additional funding. Our financial model relies on raising finance. Traditional banks are slow to lend to housing cooperatives and our borrowing capacity is further hampered by the extremely low value of houses in the area where we are building. We particularly need support during the development phase – from planning permission approval to the first residents moving in.
The project cost is around £3.5 million. Over £1 million is already covered by the sale of shared-ownership leases to existing members. We also have an existing mortgage facility with the Ecology Building Society, who are keen to provide further lending.
We aim to raise £1 million in loanstock from individuals and housing cooperatives who share our vision. Within a week of our initial loanstock announcement, individuals have already pledged £125,000.
We are now looking for housing cooperatives to invest in the project, and can offer a realistic market interest rate. Some of our lenders have chosen a lower rate to offer us more support.
The business model
Chapeltown Cohousing Ltd (formerly called Imba Yedu Housing Cooperative) is a registered housing cooperative set up in 2002. Our business model is straightforward. We will purchase the site and build new housing that is rented or leased under a shared-ownership model. Rental income will cover the ongoing cost, renovations and the repayment of loans.
We want to offer affordable rented accommodation to people who don’t have capital and don’t own a house. Each £65,000 we raise as loanstock will enable us to build another single affordable rented apartment – and each additional £6,500 will ensure it is so energy efficient that even those on low income will never have to worry about fuel poverty.
We are confident, based on our financial planning, that our plans are viable. We are staking our own homes on it. However, please be aware that loanstock is treated as an unsecured loan and therefore carries an element of risk. We are using the loanstock to purchase land and develop housing, which means that the cooperative will have substantial assets.
Benefits of investing in ChaCo
- An opportunity to invest in a way that meets the principle of cooperation among cooperatives
- An investment that matches your own social aims and values.
- A chance to be a catalyst for the provision of affordable housing in one of the most deprived areas of the country
- An ethical investment – with interest if you choose to receive it
- High accountability – you know exactly where your money has gone
- No bankers’ bonuses.
How to show your support
We don’t need you money – yet! We need your expression of interest straight away together with an indication, if you are able, of the principle terms you would be expecting for this project (interest rate, term, repayment schedule). At this stage, we simply need to know what we can raise and the potential principle terms.
We will contact you later with the full Loanstock Prospectus, and once you have read all the terms and conditions we will ask you to make a firm commitment.
Chapeltown Cohousing Ltd
Registered under the Industrial
and Provident Societies Acts,
Register No. 29376 R
115 Spencer Place, Leeds, LS7 4DU