Loanstock

Summary of offer

What is Chapeltown Cohousing Limited?

Chapeltown Cohousing is a registered housing co-operative set up in 2002 with the aim of providing, constructing, converting, improving or managing accommodation on co-operative principles.

We believe that everyone should have a home; a safe, secure place for themselves. Too often housing is a worry rather than a comfort. Most rented accommodation is short-term so provides no security, and buying a house is now out of reach for many people.

Our Project

We have recently achieved our ambition to build 29 homes and a commonhouse in the Chapeltown area of inner-city Leeds and have successfully transformed derelict land in one of the most deprived areas of the country into a vibrant neighbourhood with low-energy homes, shared facilities, recreational space, opportunities for inter-generational connections and a diverse intentional community grown from the local area.

From our beginnings with just one house and four members we have built not only houses but a community. Chapeltown Cohousing is currently full, with 49 adults and 14 children living in our new homes.

Modern living is often very individual and isolated, but in cohousing communities people know their neighbours and collaborate with them. Children benefit from more secure play-space and shared activities. Older people can benefit from companionship and mutual support. And everyone benefits from the creativity and challenge of living with others.
Co-operative cohousing shows one way of living with the future in mind. It helps create community and social connection and can provide a more environmentally friendly way for individuals and families to live because resources are shared. Cohousing can also be a positive way to respond to climate change and the pressures caused by population growth because people consume less by working together, for example through car sharing.

Co-operative cohousing is designed to enable individuals to play a more active role in the community and to provide resources that can be used as a hub for community activity and community development.

Why are we looking for investment?

In order to build the development and undertake our project, we needed to raise over £5 million. That’s a huge sum for a community group but we did it! A massive part of that was from community members lending Chapeltown Cohousing over £1.3 million. Without those loans we never would have been able to make cohousing happen. We’ve already repaid over £1 million and have further repayments to make this year.

Unfortunately our building project was far from straight-forward. Our first building contractor went bust, we were hit by massive delays because of covid, leading to our second building contractor and our architect both going bust.

Remarkably we were able to manage the delays and complete the critical building work so that every one of our members was able to move into their new home. There were still over 200 ‘snagging’ items to complete but our own maintenance team has been diligently ticking them off – either using our own expertise or by bringing in sub-contractors to complete the work.

Financially it has meant extra costs and delays to income we were expecting. We are still waiting on a payout of up to £221,000 from the insurance related to our initial building contractor. We are also waiting on a further £108,000 that relates to a portion of our site where three locals are building their own homes.

Both of these issues should have been resolved years ago but are still delayed, which leaves us with a small cashflow shortfall.

Therefore we are seeking new loanstock of at least £75,000. We’re asking for loans of at least two years to give us time to resolve all the outstanding issues.

This loanstock issue provides a great opportunity for people who want to invest in a way that makes a difference. The investment offers both a social and a financial return – transforming lives by creating a thriving community in one of the most deprived areas of the country, whilst offering investors a market interest rate of up to 4% per year.

What is loanstock?

Loanstock is non-transferable. It cannot be sold on, or transferred from one person to another unless it is held jointly. In event of the loanstock holder dying, then their loanstock would form part of their estate and can be inherited in the usual way.

Loanstock confers neither voting rights nor any control over Chapeltown Cohousing.

Chapeltown Cohousing is offering loanstock for a term of 2 years or more at interest rates chosen by the loanstock holder and ranging from 0% to 4% (inclusive) per year. As we are a housing co-operative providing affordable housing, we offer this loanstock as an opportunity for those who share our vision to help us make it a reality and see a social return on their investment, and not just a financial one. Choosing a lower interest rate offers us more support.

There is no schedule for regular capital repayments. The capital is repaid in full at the end of the term. Early repayment is possible at the discretion of Chapeltown Cohousing; Chapeltown Cohousing can also choose to repay loanstock early at any time.

The interest on loans is calculated and compounded (i.e. added to the loan) annually and paid as a lump sum at the end of the term. For example, a 5-year loan of £20,000 offered at 1% interest would earn £1,020.20 in interest, which would be paid at the end of 5 years along with the £20,000 capital. However, Chapeltown Cohousing may choose to pay some or all accrued interest annually rather than at the end of the term, in which case such interest will not be compounded (i.e. not be added to the loan).

The minimum loanstock offered for any individual is £2,000 and the maximum loanstock is £100,000.

An application form with instructions on how to apply for loanstock, and terms and conditions of loanstock is included at the end of this offer document. Please note that you can apply for more than one loanstock issue with different interest rates.

Are there financial risks involved?

Yes. We are confident, based on our financial planning, that Chapeltown Cohousing’s plans are viable. However, please be aware that loanstock is treated as an unsecured loan and therefore carries an element of risk.

You should also be aware that Chapeltown Cohousing is not considered to be conducting (or authorised to be conducting) regulated activities by the Financial Conduct Authority, and investors therefore have no right of complaint to the Financial Ombudsman or recourse to the Financial Services Compensation Scheme. Therefore, the money you pay for your loanstock is not safeguarded by such a scheme or any dispute resolution scheme.

Please consider the risks of investing in Chapeltown Cohousing carefully and, if needed, seek independent advice from an independent financial adviser or other person experienced with investments of this type.

Benefits of investing in Chapeltown Cohousing

• An ethical/social investment – with a financial return by way of interest if you choose to receive it
• An investment that can transform lives
• An investment that may match your own social aims and values
• An opportunity to be a catalyst for changing the way that housing is provided and the way we live, in one of the most deprived areas of the country
• A chance to support an organisation that may share your values
• An investment with high levels of transparency – you will be able to see where your money has gone through the housing developed on the site.

The co-operative advantage

Is being a co-operative good business? Yes, according to a report by Co-operatives UK , which revealed the following:

• Fairness – 75% of people in the UK think co-operatives are fair, while only 18% think public listed shareholder companies (PLCs) are.
• Trust – 66% think co-operatives can be trusted, but only 29% think PLCs can.
• Honesty – 63% think co-operatives are honest, compared with 15% who think PLCs are.
• Public good – 65% of people think co-operatives work for the public good, compared with 12% who think PLCs do.

Furthermore, co-operatives as a whole have consistently outperformed the rest of the economy (taken as a whole). For example, figures from Co-operatives UK revealed that co-operative businesses in the UK increased their combined turnover by some 19.5% to over £35.6 billion, despite the GDP of the UK decreasing by 1.7% in the same period.

Our financial model

Chapeltown Cohousing’s business model is in many ways straightforward. Rental income and member contributions cover our ongoing cost, renovations and the repayment of our loans.

In other ways our model is quite complex as it involves arrangements to ensure the housing is affordable, such as shared ownership and affordable rent levels. We also collect maintenance payments from members and then use that collectively for maintenance on members’ homes and we bill members for their electricity as we have a collective system and solar panels that are shared by everyone.

Below is the simple version of our annual budget. This ignores members’ maintenance and electricity and loanstock, as these have their own budgets with their own income that covers their own expenditure. In the case of loanstock over the next few years we will repay loanstock from getting new loanstock in.

Budget for 2025

How to invest in Chapeltown Cohousing Limited

It’s simple. Just choose whichever of these three options is easiest for you:

• Apply online – just fill in the pledge form below.
• Or: Send us an email – all we need to know is how much loanstock you can offer, how long for, what interest rate you would like and your contact details (name, address, email and phone number). Send your email to loanstock@chapeltowncohousing.org.uk
• Or: Complete the application form and post or deliver it to our Commonhouse. You can download the application form here.

We suggest that you download the application form even if you plan to pledge online or send us an email. The application form spells out all the terms and conditions.

Chapeltown Cohousing Ltd
Registered under the Industrial
and Provident Societies Acts,
Register No. 29376 R
Registered Office:
The Commonhouse, Leopold Park Road, Leeds, LS7 4AX

Loanstock Pledge Form