COMMUNITY HOUSING - A Practical Development Guide PDF

So you want to build a house...
…
Community Housing: a practical development guide
David Brettell
Federation of Northumberland Development Trusts – FoNDT
FoNDT is a collective of the 21 development trusts in Northumberland. Together they seek to explore cooperative
working and funding opportunities, raise the profile of trusts in Northumberland and share learning experiences.
David Brettell
David started working with development trusts in 1995 as a volunteer, setting up a rural trust and being treasurer for
5 years. He has also been employed as a CEO of a development trust.
Since May 2005, he has been involved in developing affordable housing as a community owned asset. This has
included writing reports on the subject such as Housing: a community asset? and Owning a Piece of Home – both for
the DTA. He is also an associate member of the National Community Land Trust Demonstration Programme run by
Community Finance Solutions at Salford University and an advisor to the CLT Fund operated by the Tudor Trust.
David is a member of the DTA consultancy pool, a supporter/mentor for the Adventure Capital Fund and an advisor
for Community Asset Fund projects.
As a local “mainland” resident he acted as a consultant to the Holy Island CLT project in assisting their accessing of
Homes & Communities Agency funding.
Written by David Brettell
for communities
Jo Gooding
Charbagh, Lickar Moor, Housing & Community Land Trust Officer
Berwick-upon-Tweed TD15 2TG Development Trusts Association
Telephone: 01289 388680 33 Corsham Street
Fax: 01289 388665 London N1 6DR
Mobile: 07900 978291 j.gooding@dta.org.uk
E-mail: david@hands-on-help.co.uk 07912 269671
So you want to build a house………
COMMUNITY HOUSING: a practical development guide
CONTENTS
Call for Action - FoNDT Housing Group
CHAPTERS PAGE
1. Introduction 1
2. Firm Foundations 4
3. Land 10
4. Construction 19
5. Money 33
6. People 48
SUPPORTING RESOURCES (DOWNLOADABLE FROM WWW,DTA.ORG.UK)
A Guide to accessing HCA grants (National Affordable Housing Programme)

B Written rules for delegated sub groups and steering group working
C Appraising Sites – a guide by National Housing Federation
D Measuring what Matters – a report on measuring social impact
E Memorandum of Understating – examples
F Writing a Good Brief – some thoughts
G Extract from a architects brief
H1 Contract for Services examples
H2 Contract for Services examples
I Procurement Routes – extract from CLT Practitioner’s Toolkit
J Local Multiplier 3 – a simple example
K Measuring the value of your assets – a personal view
L Disposal Models for CLTs – papers by Bob Paterson & Ian Moran
THE CHALLENGE
The Housing Challenge
Development Trusts, Community Land Trusts and other community based organisations are
demonstrating the benefits of community owned and managed housing. Community housing
creates new active citizenship, strong local partnerships, is securing alternative sources of
finance to support housing development and brings land forward that would not otherwise
happen. But the development process is long and arduous and some community organisations
face difficulties maintaining momentum and raising the development funding to acquire the
skills and resources to see the process through.
The FoNDT Affordable Housing Project (Dec 2006 – March 2009) was established to explore
issues and try out practical community led affordable housing delivery solutions. The
following suggestions are based on the experiences of the project. Development Trusts across
Northumberland remain actively engaged in housing initiatives and the FoNDT Housing
Group continues to develop this agenda. The Group believes that many of the ‘challenges’ set
below can be achieved within the Northumberland current housing and regeneration delivery
structures and the intention of this challenge is to spurn action and dialogue on the ideas
presented below:
Establish an inclusive and proactive Northumberland Housing Forum

bringing together practitioners and strategic housing functions.
Representation on the Forum should include the County Council,
Northumberland National Parks, registered housing providers, advice and
homelessness charities, health authorities, development trusts, the Homes and
Communities Agency and other third sector organisations.
Establish a county wide Revolving Loan Fund to support feasibility and initial
development costs. The fund would offer a mixture of grant and loan funding
and loans could be repaid from capital funding of housing schemes. The
FoNDT Affordable Housing Group prepared a proposal on this suggestion,
please seek details and a copy of this paper from FoNDT.
In 2008-09 income from the suspension of Second Homes Council Tax

discount provided approximately £950,000 additional funding to local
authorities. There is currently no legal requirement to ring-fence use of this
receipt, however many local authorities have established specific funding
streams to support the delivery of rural affordable housing. In
Northumberland, 50% of this capital receipt could establish a £450,000 annual
‘rural development fund’. The proposed fund would be aimed at supporting
new investment approaches to affordable housing, local enterprise
developments and sustainable living projects.
Homes for Northumberland are currently exploring new development
partnerships to take advantage of surplus local authority land and build much
needed social housing in the County. FoNDT is aware that some of the
proposed developments are some distance from Homes for Northumberland’s
current housing stock and management functions and would welcome
discussions about local management agreements with development trusts
where appropriate.
One of the over-riding learning outcomes of the FoNDT Affordable Housing

Project is the potential from partnerships between development trusts and
registered housing providers such as Homes for Northumberland and housing
associations. Potential partnerships could involve sharing development
experience; development trusts in Northumberland have successfully
developed a portfolio of community assets but many would welcome working
with a housing provider to learn more about developing housing as a
community asset. There are also possibilities around neighbourhood
stewardship and procurement of social enterprise goods and services.
FoNDT would like to explore and formalise continuing local authority

support for community housing development. Ideas to work on include the
County Council acting as guarantees for development finance and Social
Housing Grant. FoNDT welcomes the continuing dialogue with the County
Council on appropriate transfer of public assets to development trusts and
other third sector organisations.
Develop a protocol (perhaps through the Northumberland Housing Forum) to

share information on housing needs and asset holdings within the County of
both statutory partners and community organisations.
The FoNDT Affordable Housing Group firmly believes that development

officer support is vital to sustain and take forward community housing
delivery in Northumberland. The Group has developed positive working
relationships with the two local authority housing enabling officers and the
Homes and Communities Agency regional investment team. Alongside this
the Group is seeking resources to secure independent development officer
support similar to the Northumberland Affordable Housing Project Officer.
FoNDT Housing Group

October 2009
1 INTRODUCTION
In early 2005 the Northern Rock Foundation (NRF) commissioned a study to look at the social
enterprise opportunities of development trusts building and managing houses. The study
showed that across England a few trusts were already getting involved in housing schemes, but
for the majority of trusts, although they had developed other kind of physical assets, for various
reasons, housing was thought to be outside their comfort zone.
Many barriers to getting engaged in housing projects were quoted, including the “closed shop”
approach of the housing sector, almost non-existent grant support, impenetrable “housing”
language and limited specialist knowledge.
On the back of the NRF report, the Federation of Northumberland Development Trusts
(FoNDT), with the support of the DTA and the North-East Regional Development Agency,
employed an affordable housing officer to support community organisations develop housing
projects. This officer post ended in March 2009.
At around the same time, the burgeoning interest in the Community Land Trust (CLT) model of
delivering community owned and managed assets, culminated in the first national CLT
conference in Warwick in May 2005. Following the conference, the National Community Land
Trust Demonstration Programme began providing support for community groups who wished to
develop housing schemes using new models of tenure and fundraising.
This guide represents a collection of the practical lessons learnt during the sometimes
complicated process of getting a housing scheme off the ground. The Northumberland examples
led mainly by development trusts, have been added to by the experiences in Cornwall, Cumbria
and Wales/Shropshire where CLT support workers are in place.
Who is the guide for…. Where this guide fits in…….. ?
The size of the community housing sector is small. Co-operative housing is a well established
and respected delivery model, as are resident owned small housing associations. Development
Trusts across the country are recognising the role they can take in enabling more affordable
housing in their local communities. Some trusts are developing and managing housing as
community housing, others are working in partnership with other housing providers to enable
development through the sale of land or as a local stakeholder with a remit to achieve better
outcomes. Those trusts that have developed and now manage housing generally own less than
10 units, a very small sample have over 100 units.
A common trend is for trusts to develop housing alongside other community assets such as
workspace, retail units and other community facilities. A very small number of trusts are
involved in managing local housing or providing associated estate management services on
behalf of a housing provider. This guide is predominately targeted at those considering
developing and managing housing independently. It aims to fill a gap specifically on the process
of developing a community trust led housing project. It is not intended to be comprehensive,
nor can it be relied on as the sole source of advice and information on the practicalities of
developing a community led housing scheme.
COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – INTRODUCTION PAGE 1

So you want to build a house…….
The world of housing never stands still and a quick look at the publications list on the websites
of the National Housing Federation (www.housing.org.uk) and the Chartered Institute of
Housing (www.cih.org) will give an idea of the depth and breadth of the subject. This
publication will however, hopefully provide added advice into the range of existing manuals &
toolkits on the subject – see below.
There are numerous good guides and toolkits covering How to set up a CLT and How to develop
a community asset. Reading any of these will increase knowledge of the subject.
To Have and to Hold Housing: a community asset? Owning a Piece of Home

This Guide provides a broad range of A report produced by the DTA on behalf A review of the subject of how trusts
information, resources and contacts that of Action for Market Towns. It details can share a home they own with
you can use to develop a land or building the different roles that community someone in their community. Based
project that is an asset for your organisation organisations can take in developing largely on the work being undertaken
and local community. housing as a community asset and looks by the Community Land Trust
See www.dta.org.uk for details. at some of the models available. National Demonstration Programme.
See www.dta.org.uk for details. See www.dta.org.uk for details.
Then we will do it ourselves

– a report on rural CLTs
CLTs - a practioners toolkit Placeshaping: a toolkt for urban CLTs The publication covers the key issues for
The guide aims to give help in getting a The report offers a path through the rural CLTs and demonstrates what is
CLT started and also to be a useful maze of urban policy and legal possible when the ingenuity and hard
reference tool throughout the various stages complexities to show how Community work of local communities is matched by
of a CLT project. Land Trusts can contribute to place- a progressive approach from local
See www.communitylandtrust.org.uk shaping in urban communities. authorities and funders.
See www.communitylandtrust.org.uk See www.communitylandtrust.org.uk
So you want to build a house ……

Community Housing: a practical development guide
…… concentrates on the practical issues of delivery based on projects which have built community
owned houses. ….. targeted at trusts who are established, maybe have a track record in delivering projects
and now want to look at housing as a community asset. ….. is concerned with the processes of design,
construction, delivery and management of community housing.

How to use the Guide
There is no logical step-by-step process in ticking off the tasks en route to the successful
delivery of a community housing project. Some projects may start with the purchase or gift of a
piece of land but for others the starting point could be dealing with the outcome of a Housing
Needs survey.
The layout of information contained in this guide is under four simple headings – Land, Money,
Construction and People. Under these headings you will find advice on related topics and
signposts to websites or publications where you can learn more.
Unless you happen to be a trust with its own construction company, the likelihood is that you
will take on the services of a development team. As a trust you then become a client. Being a
good client is the single most important factor leading to successful project delivery.
If you are a Trustee of the client body you should understand the basics of the information
contained in the following sections. If you are directly involved in developing the project or
supervising the development team then you should have a good understanding of the
information and be seeking out further guidance as suggested.
Supporting the chapters of this publication are a range of Resources. They could be further
guidance notes, example documents, templates for you to use or case studies. All of the
resources are downloadable from www.dta.org.uk/housing and will be updated as more is learnt
from future practical delivery of community led housing projects.
Before we start on the first subject we need to be sure you and your trust have the Firm
Foundations required to develop a scheme.
MONEY PEOPLE
£ CONSTRUCTION
LAND
FIRM FOUNDATIONS

2 FIRM FOUNDATIONS
2.1 Introduction
In this section we will explore what needs to be in place within your organisation to support
the successful delivery of a housing scheme. This could include skills, policies, procedures, and
powers. Even if you are an experienced existing trust embarking on a new challenge, looking
at your organisational structure and governance arrangements in connection with a housing
role is still recommended.
2.2 Legal Issues

The most popular form of legal structure taken by trusts is a Company Limited by Guarantee
(CLG) – with the majority registering the company as a charity. An Industrial & Provident
Society structure is also popular and a few Community Inertest Companies have been created.
Whatever the structure used it is important to remember that the name of the community
organisation does not need to reflect the legal model used. i.e Glendale Gateway Trust,
Gloucestershire Land for People.
2.2.1 Charitable companies are perfectly possible and the Charity Commission should be
willing to register a charitable company that is focussed on housing. However, the company’s
objects will have to make it clear they will only house people in charitable need - i.e those
who cannot house themselves on the open market. Stating that the trust is going to provide
housing is not enough to get charitable status - you have to say you are going to house people
who are poor, disabled, ill, elderly or have some other need. There is no substitute to taking
legal advice on this subject.
2.2.2 Many trusts trade, even those who are charities. However, if the trading activity is not
part of delivering the charity’s primary purpose, and is significant (more than 25% of your
annual income), there are charity and tax law implications. Primary purpose trading means,
for example, that an educational charity can sell educational materials, a social welfare charity
can deliver welfare services under a contract, and a community centre can rent out rooms for
community activities.
Some trusts set up separate trading arms to carry out trading activity and donate any surplus
income to the charity. If a charitable organisation sets up a significant trading activity, which
is unrelated to the charity’s primary aims, and is purely aimed at raising funds, it needs to do so
through a separate organisation. Many trusts have now set up separate trading arms to carry
out trading activity and donate any surplus income to the charity.
Using subsidiary trading arms can also be a way to separate assets from one another. In this
way - depending on the legal circumstances - the assets of the “housing trading arm” could not
be called upon to pay off any debt incurred by the collapse of say, the “retail trading arm”.
If your trust does not have the supply of housing as a primary aim, or the income from housing
will be significant, you should consider seeking professional advice re the establishment of a
trading arm.
COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 4

2.2.3 There is a legal definition of a CLT which was created in the 2008 Housing &
Regeneration Act (Part 2, Chapter 1, Clause 79). It states:-
A Community Land Trust is a corporate body which:-
1. is established for the express purpose of furthering the social, economic and
environmental interests of a local community by acquiring and managing land and
other assets in order –
• to provide a benefit to the local community
• to ensure that the assets are not sold or developed except in a manner which the
trust's members think benefits the local community
2. is established under arrangements which are expressly designed to ensure that:
• any profits from its activities will be used to benefit the local community
(otherwise than by being paid directly to members)
• individuals who live or work in the specified area have the opportunity to
become members of the trust (whether or not others can also become members)
• the members of a trust control it.
A key element of the legal definition is the premise that the trust has community membership
and control at its heart.
The majority of trusts who are members of the DTA will fit this definition. This could be
important because there may be instances when fitting the legal definition is required – such
as obtaining a grant from the Homes & Communities Agency - see Resource A & section 5.4.2
Many existing development trusts have looked at establishing a separate CLT within their
development trust structure. If you are one of them, take a look at the definition and think –
Is this us? In the majority of situations the trust will be able to develop and manage a housing
scheme within its existing structure.
2.2.4 Using an Industrial & Provident Society structure allows for the ability to raise shares
to support the financial needs of a scheme. There are important issues to consider regarding
the nature of share issues conducted, how they could affect any charitable status, and
compliance with the CLT legal definition. As ever, taking proper legal advice from someone
who understands the subject is very important.
Since a CLG cannot issue shares - but can issue bonds - there have been investigations into the
possibilities of linking an IPS to a trust (CLG) structure. Opinions on whether it is possible or
legal are mixed and as yet there are no known working examples. Converting a CLG into an
IPS is possible and reasonably straight forward, although it is likely to cost around £1,000 of
legal fees. For more on shares and bonds see section 5.4.2.

2.2.5 A number of issues concern the subject of assets.
The provision of some from of “asset lock” should be in place. This demonstrates the fact that
any land or property owned by the trust will only be used for the benefit of the community.
“Locking the assets” does not mean they can never be sold – it just means that the sale has to
follow certain rules.
Under simple Company Law there is the ability to include an asset lock clause within the
definition, but it is not permanent if the members have the power to change it at some time in
the future. If the company is also a charity then a form of “asset lock” exists in that the trust
can only dispose of assets in accordance with sections 36-37 Charities Act 1993, which do not
allow sale and distribution to individuals/members.
A trust which is an IPS (Community Benefit Society) can include an asset lock within its rules
– see Community Benefit Societies (Restriction on Use of Assets) Regulations 2006.
With the “asset lock” issue in mind, the trust also needs to ensure it can deal fully with its
assets. It should have a power along the lines of being able to, “sell, lease, or otherwise dispose
of all or part of land and buildings”.
On the subject of borrowing money to deliver a scheme, one of the main hurdles will be giving
the loan provider sufficient security so that if required they can sell the houses and get back
their loan – this often conflicts with the trust’s desire to see the houses protected as affordable
in perpetuity (see section 3.5.6 on s106 agreements). Some trusts will have other assets against
which they can borrow, but the full value of that asset may be limited by the original funders
of the asset, by other restrictive conditions placed on it, or by charity law (see section 5.4.4).
2.3 The Right Team

Even for an experienced community organisation, getting involved with a housing scheme can
be a big commitment. Housing schemes are likely to involve applying for a bank loan,
selecting and managing a range of external consultants, entering into new forms of legal
agreements and taking on some form of long-term relationship with either tenants or shared
home owners. The trust board should collectively possess the skills and knowledge mix
required to develop the scheme, take decisions and deliver. Equally, experience shows that it is
vital to maintain momentum through all the obstacles which may arise – see Being a Good
Client section 2.6)
Some of the desirable skills and experience include individuals with knowledge of:-
• Finance • Working with people

• Construction • Business & Marketing
• Property development • Law
• Charities and communities • Project delivery
Depending on the level of housing already owned/managed by the trust, consideration should
also be given to including a tenant representative on the board.
Ensuring that the management board has the right range and depth of skills is very important.
Most trusts have the ability to co-opt members onto their board to enhance the skills required
or establish a sub-group who can pull in additional non-board advisers.

2.3.1 If a dedicated sub-group is the chosen delivery path, then it is important to ensure that
the relationship between the board and the sub-group is firmly established so that each set of
individuals knows what to expect from the other (See Resource B). Section 2.1 of the CLT
Practitoner’s Toolkit gives more advice on the steering group process.
2.3.2 Selecting the right set of scheme advisers is also very important. Who you will need,
how you should select them and how you should govern the working relationship is covered
in the sections that follow. As part of the overall team the message here is that all external
advisors and consultants will need managing – this is a job for the trust board – even if done
via trust staff. It is very important that the trust board have an understanding on what is being
done in their name. Managing the managers is a role only the trust board can perform.
Keeping on top of the overall management of the scheme as it develops should also avoid (or at
least severely restrict) the possibility of either a consultant or external adviser “hijacking” the
scheme and turning it into something over which the trust feels it has no control.
2.4 Resources & Governance

Supporting the successful delivery of a housing scheme, a range of lesser issues concerning the
running of the trust have been identified.
2.4.1 Establishing an outward presence was seen by many trusts to play an important part in
showing the partners you will be dealing with that “you mean business”. This could involve
activities such as creating a logo and headed stationary, setting up a website or designing and
printing some marketing/publicity material.
2.4.2 Internally, trusts have reported the need to be more efficient in recording the process
of developing a scheme and all of the various stages and decisions taken along the way. The
process of recording could be trust minutes, file notes or fuller reports. The key message here is
that a housing scheme can be complex and so keeping a firm handle on the paperwork is
something to be undertaken from the very early stages.
Linked to this subject is ensuring that written rules (sometimes know as Standing Orders or
Terms of Reference) have been firmly set on the process of decision making – or the delegation
of decision making. Any delegation process should include clear limitations connected to such
subjects as budgets, contractor appointments, design sign-off etc.
Establishing polices governing such issues as Equal Opportunities and Conflicts of Interest are
also core requirements many funders may wish to see.
2.4.3 Many new trusts face the problem of being offered grants to get set up – but being
unable to open a bank account until they are set up! Ways around this include using the local
Parish/District Council as a banker until new accounts are established. Bank signatories are
worth giving some extra thought to as mortgagee offers and legal documents will need to be
signed as a project progresses. Make sure you have sufficient easily available signatories to
avoid time delays.
Trusts which are also charities have additional financial rules to consider when they pay for
work and in connection with taking on mortgages (section 38 Charities Act 1993).

2.4.4 Ahead of the section on money, there are a few subjects to consider re the charitable
status of an organisation.
Stamp Duty Land Tax (SDLT) is charged on property transactions in the UK where the value
exceeds certain thresholds (currently £175,000 until end Dec 2009). However, some
transactions qualify for relief that can reduce the amount of tax payable - or mean that no
SDLT is due. So long as certain conditions are met, charities can get relief from SDLT when
they buy land and property for charitable purposes. The relief can be withdrawn if either of
the following occurs within three years of the transaction:
• the charity stops being a charity

• the charity uses the property for purposes that aren't charitable
Charities can be exempt from Corporation Tax, but it depends on the source of their income
coming from charitable activities. The test to apply is, what are the trading activities of the
charity? If houses are bought and sold on the open market the transaction is likely to be
subject to corporation tax. Expert tax advice should always be taken.
2.4.5 Plans often go wrong. House building is notoriously unpredictable and littered with
horror stories. As a trust and a board of trustees managing risk and knowing what to do when
things go wrong are not subjects just to deal with when they arise – they need to be identified
and planned for in advance. Good project management and good leadership are essential.
2.5 Do you know the needs of your community?

Before your Local Planning Authority will grant you consent to build the proposed houses,
they will need to be sure that there is a need for them. This introduces the subject of regional
housing strategies and local Housing Needs Surveys, in which a trust may never have been
previously involved.
A Housing Needs Survey is a method of collecting evidence which will identify what different
kinds and numbers of households an area (e.g. single person, couples, families, elderly people
or disabled) and project the level of current and future needs for housing in the area. The
geographical area of the survey is usually a parish or other defined settlement.
Any scheme to be developed by a trust needs to be built upon the evidence of a survey. In
simple terms, if you want to build 30 two-bed houses and the survey says there is no need, the
planners are very unlikely to give their consent. On a more practical side, your scheme needs
to be based on a sound and robust business case. Whether you are going to rent out the houses
or sell part of them in a shared ownership scheme, you need to know that when you have built
your houses there is the market out there for them. For this reason, getting behind the data of
your local Housing Needs Survey is a vital element of your scheme’s business planning (see x.x)
2.5.1 Most rural Counties have Rural Housing Enablers to help communities undertake
housing needs surveys. They are generally employed by the relevant Rural Community
Council (RCC) or the local council.
A Housing Needs Survey can provide the opportunity to provide a range of other information.
A good survey will collect data on more than just the housing. It will look to get behind the
housing information and explain what the findings mean for the community as a whole. Such

a detailed report might also include information on population change, rural services, and the
local economy.
As part of the FoNDT project, the Seahouses Development Trust undertook some very
innovative community engagement exercises – see section 6.2.1.
2.6 Being a Good Client

If there could be only one message to give a trust to better help them deliver a successful
community housing project it would be the need to be a good client.
CABE, the Commission for Architecture and the Built Environment, are the government's
advisors on architecture, urban design and public space. Whilst they are generally concerned
with much larger scale projects, some of their publications contain good general advice. In
Creating Excellence in Buildings1 (section 1.4), they list ten key ways to be a successful client,
(the comments in italics are not their words):-
¾ Provide strong client leadership – most successful schemes are delivered by a strong
community champion who provides leadership to a good team.
¾ Give enough time at the right time – your building is going to last a long time, so be
prepared to put in time upfront to make a better end project for the future.
¾ Learn from your own and other successful projects – the community trust sector is
blessed with people and organisations who are happy to share the good and the bad of
what has gone before - make an effort to learn from others.
¾ Develop and communicate a clear brief – never assume people are telepathic. Set down
what you want to achieve in a clear brief (see section 4.3).
¾ Make a realistic financial commitment from the outset - think about budgets from day
one and remember innovation may cost a little extra
¾ Adopt integrated processes – this means working together; your trust, the stakeholders
who will play a part, your funders, the external help you bring in and the builders who
will take your ideas off the drawing board and turn them into a home for local people.
¾ Find the right people for the job – working with communities takes special skills. You
need to be surrounded by people who will do the best job for you, who understand
who you are and what you are trying to achieve.
¾ Respond and contribute to the context – as a community led organisation this is a

natural driver. Your project will provide much more than just homes for local people,
it is likely to achieve much wider rewards so make sure you “think holistic”.
¾ Commit to sustainability – communities are often at the forefront of sustainable

thinking because it is all about their future. Your project should reflect their desires.
¾ Sign off all key stages – be a good clear decision maker. Don’t dither. Give your design
team the knowledge that you have signed off work and can now move forward.
1 A free download from - http://www.cabe.org.uk/files/creating-excellent-buildings.pdf

3 LAND
3.1 Introduction
As a rough guide, the price of land represents around 25-30% of the cost of the open
market value of the house. Removing the value of the land from the equation is the easiest
way for a trust to achieve greater affordability in connection with the delivery of a
community led housing project.
In a large number of cases, the identification (or offer) of a piece of land, or a property,
may be the catalyst for a project. In this section we will look at how land may come
forward to support a housing project, and how you as a trust can influence this process.
We will also give some guidance on what to look for when viewing land, how to secure its
use if you think it is worth developing and some of the legal and technical issues you
could face in turning it into a building plot for your houses.
We will also look at renovating and refurbishing existing buildings.
3.2 Finding a Building Site

When one site is the catalyst for a scheme, there is a danger that a lot of time and energy
can be spent following one site to the exclusion of others. Another approach is to keep a
register of sites in the local area. At its basic level the register should contain information
such as:-
• Description of site, size etc with map & photos

• Landowner details – contact agent etc.
• Estimate/evidence of value (ideally a current appraisal)
• Planning position – in-fill, identified exception site?
• Site issues - topography, ease of access, utilities etc
• Description of improvements, including the type, capacity and location of utilities
• Uses of adjacent land and properties and any issues/concerns to consider
• A viability assessment – what housing could the site support, number of units?
• Actions to be taken.
When embarking on the search for sites, you need to be clear about the messages you are
giving. The four key messages you should look to give are:-
• You as a not-for-private-profit community organisation are looking to secure the

land or property to be used to meet local need.
• You will work with the landowner to secure planning permission in line with the
proven local need and in support of planning polices.
• You will provide to the planners the comfort that your development of the land
will answer identified local need, will meet all their planning policies and will
give a fair deal for the landowner.
• You intend to build quality housing with high environmental standards.
COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – LAND PAGE 10

Land and property can come to a trust in various ways;
• an “asset transfer “– at low or nil cost - from a public sector1 - The Quirk Review
provides a framework through which public assets can be transferred to
community ownership. As a response to this Review, Tynedale District Council2
proactively explored new models of investing in the provision of affordable
housing using its redundant assets. Simultaneously a number of development
trusts identified the area of housing as both a local community need and a means
of providing a long term revenue stream for the organisation. As a result a number
of initiatives have been taken forward:
Allendale Community Housing Ltd (in conjunction with a registered housing

provider) will be building 3 homes for rent on a brownfield site transferred from
the local authority on a 99 year lease. Tynedale District Council recognised the
cost constraints on a small development and provided a grant for preparing the
land prior to development.
Prudhoe Community Partnership are also actively progressing an asset transfer

scheme. In this initiative the Partnership plan to bring several retail units into
good order and develop the space above for affordable housing.
• regional and local regeneration programmes - Haltwhistle Community

Partnership’s acquisition of a large prominent market square property to provide
2 rental units and 4 social rented apartments (Purchase price met by One North
East Single Programme Funding from Northumberland Strategic Partnership).
• local networks and connections - often best source of development opportunities.

Philanthropic gestures are not unrealistic where land/property owners share same
concerns about local sustainability/difficulty recruiting or retaining staff.
• as part of a wider commercial scheme - e.g where a factory, business park or

public utility site releases land that is then given community housing
development classification.
• at low-cost due to the use of the land being restricted by planning conditions,
making it unattractive to developers operating in the open market
• sold at a discount by private companies as part of larger schemes, or under their

corporate social responsibility programme
• connected with a wider scheme as part of a section 106 planning obligation (see
section 3.5.6)
1 See DTA ‘Better to Borrow’, - a practical guide describing rationale for asset transfer. www.dta.org.uk
2 No longer in existence following local government reorganisation into Northumberland County Council

Additional tips from trusts on how to find sites are: -
• Advertise in Parish magazine - backed by Parish Council support.

• Establish your own local networks
• Work with Local Authorities (there is a note of caution here about being led by
LA staff to took at their preferred sites, rather than the ones you select)
• Undertaking Land Registry searches on line at www.landregistry.gov.uk
3.3 Site Appraisals

Appraising a potential development site or in basic terms “working out if a scheme is do-
able” is an important part of the project process. Trusts may be able to have a reasonable
attempt at researching and understanding the limitations of a site, but as the task gets
more complex the likelihood is that they will need to employ an external consultant to
undertake the work. In chapter 4 Construction, we will look at consultants and their
employment.
Many Housing Associations use pro forma checklists to appraise sites so that consistent
results are shown to compare sites. At Resource C you will find a fuller guidance note on
the subject of appraising sites taken from the National Housing Federation’s recent
publication, Developing affordable housing3.
3.4 Securing the Site for your Scheme

Once a site has been selected, steps need to be taken to secure its purchase up front, or
secure the option to purchase it when you are ready to proceed with the full scheme.
3.4.1 In the introduction to this section reference was made to the value of a
development site against the cost of an open market site. Depending on who you ask, the
value could range considerably. A developer will value it at the lowest price so they can
improve the viability of a housing scheme, the landowner will see it at the top end.
The important message here is that the supply of land and property for affordable housing
(which is the majority of schemes trusts will deliver) is not the same as the supply of land
for open market housing and since the supply is different, so is the value. For the
landowner, if the only planning permission which can be obtained for the land makes
limitations requiring some or all affordable housing, this in effect deflates the sale value of
the land.
Since both sides of the deal will need to agree the price, the trust should consider using
the services of an independent qualified valuer to help provide a valuation. This could be
the district valuer (see www.voa.gov.uk) or a member of the Royal Institute of Chartered
Surveyors (RICS – www.rics.org).
3.4.2 Perhaps much more important for a community trust is not the pure financial
value of the piece of land but the wider social, environmental and economic value of the
whole scheme it wishes to deliver. Calculating this overall impact is sometimes stated as
“measuring what matters” or Social Impact. It is a huge topic, but is likely to play an
3
See publications list at www.housing.org.uk

importance growing. It is particularly important in connection with potential asset

transfers. The Asset Transfer Unit website www.atu.org.uk has more information on the
subject. Resource D is a short overview of the subject by Tony Rich.
3.4.3 Investing time and money into developing a housing project on a site can be
costly. Spending money when you do not own the land is a risk, but then again buying
the land before you know what you can do with it is also a risk.
An option agreement gives the trust, as the potential purchaser, the future opportunity to
buy a piece of land or property. The agreement will also fix the future purchase price and
is generally time limited. The trust may be required to put down a deposit to secure the
option. If it does not go on to buy the land or property within the specified time period it
will generally lose the deposit.
The option agreement buys the trust time to develop their plans, employ consultants,
obtain planning permission and raise the funds to deliver the full scheme. When the
scheme is ready to go, the trust takes up the option to buy the land. You will need legal
advice to secure an option agreement.
3.4.4 By now the trust is likely to need to talk to a solicitor. It is important to ensure
that the solicitor chosen has the specialist skills required.
The first task they are likely to perform is the conveyancing of the site i.e transferring the
ownership of land or property from the landowner to the trust. This service will include
the solicitor providing a “report on title” - “Title” being the legal term used for the
collection of rights over a piece of property or land.
The Homes & Communities Agency (HCA) will only supply grants to develop registered
land, so if the trust intends to apply to the HCA for a grant they will need to ensure the
land they are buying is registered at the Land Registry.
Additional legal advice is likely to be required in support of the following aspects of the
housing scheme:-
1. Securing an Option Agreement

2. Land development issues such as agreements with highways, water authorities etc
3. Negotiating the detail of any planning agreements (s106)
4. Supporting the trust take on any bank loans.
3.5 Building on the Land

Before any “development” takes place on the land you have bought (and ideally before
you buy the land!), you must get planning permission. The term development includes
building on the land, mining, and making material changes to existing buildings.
To control what development can take place there is the planning system and all of the
planning polices and guidance notes which support it.

Planning policy is set and interpreted at the various levels of local government and guided
by such documents as Regional Spatial Strategies and Local Development Frameworks.
The assessment of a planning application and the granting of permission is undertaken by

the local Planning Authority – in most cases a department in your local council.
3.5.1 Rural Exception Sites are plots of land that are not earmarked for development.
However, they are given ‘exceptional’ planning permission to meet affordable housing
needs. Rural exception sites should only be used for affordable housing in perpetuity. The
sites normally exist at the edge of settlements and permission can only be granted if there
is a proven need for such housing and if the local community – usually the Parish Council
– support the scheme.
The schemes are usually small (fewer than ten houses) and because the land could not
attract planning permission for any other type of housing, the sites are generally made
available at substantially below market price. Historically, Local Planning Authorities
have only allowed the development of exception sites by housing associations but there is
no specific planning requirement that this should always be the case.
A Rural Exception Site Policy within a Local Development Framework should seek to
address the needs of the local community by accommodating households who are either
current residents or have an existing family or employment connection. They should also
ensure that rural areas continue to develop as sustainable, mixed, inclusive communities.
3.5.2 Establishing a good relationship with your local planning officer is advisable so as
to get clear and up front guidance. And having a conversation with him or her should be
something undertaken at the earliest opportunity.
It is worth remembering that the majority of planning officers will never have handled a
planning application to build houses from a community trust. However, the concept of
communities getting involved in housing projects is starting to become more
commonplace and so it should not be a great shock. The principle is also clearly expressed
in documents such as Planning Policy Statement 3 and the supporting Delivering
Affordable Housing publication.
3.5.3 Whilst the likelihood is that you as a trust will employ someone who knows the
planning system and who can present your scheme so that it gets planning permission,
there may be times when the trust acts alone.
Understanding some of the basic planning rules will be useful in guiding you through the
process and ensuring you get what you desire. The best source of information is the
government’s Planning Portal – the place where on-line applications can be made –
www.planningportal.gov.uk. The table over gives some basic planning information.

SOME PLANNING BASICS.
Anyone can make an application, irrespective of who owns the land or buildings concerned. However, if
the trust is not yet the owner you do have to inform the owner.
Your planning application will be assessed against the local development plans, which will cover a range
of issues such as;-
• the number, size, layout, siting and external appearance of buildings;

• the proposed means of access, landscaping and impact on the neighbourhood;
• sustainability, and whether the necessary infrastructure, such as roads and water supply, will be
available; and
• the proposed use of the development
Permission can be obtained against all of these criteria at once using a “full” planning application or in the
case of new build schemes you can apply for “outline” permission to see if the development is acceptable
in principle. The level of detail required for an outline permission is generally the proposed use, layout
and size and scale of the development.
If outline permission is granted, the full details of the application need to be submitted before works can
commence (within 3 years) – these are known as “reserved matters”. The full details of the scheme (layout,
number of houses etc) must of course be in line with the outline permission. Full planning permissions last
3 years – so you must start on site before then or re-apply.
Whilst for a trust with limited financial means the option of going for outline permission means that they
do not need to pay up front for detailed drawings , most schemes go straight in for full permission.
Fees will be payable for applications and are non refundable – they are roughly £335 per dwelling (up to
50 units). There is a 50% reduction if the application is made by the Parish Council.
In considering your planning application the local planning authority must take into account “material
consideration” connected with your application. Arguments that the new housing could have a negative
affect on other property values is not seen as “material”, however concerns that the development could
have an adverse affect on road safety, cause noise and disturbance can be taken as “material”.
Developments of less than ten units (or less than 0.5 hectare) are termed as small and should be considered
by the local planning authority in eight weeks. Larger applications should be decided upon in 13 weeks.
The size of the application is also important in the level of supporting reports required, for example the
Holy Island of Lindisfarne application was posted in an envelope whilst the High Bickington application
for 36 houses, a community centre, workspace units and much more, filled a suitcase!
Early pre application advice from your local planning officers or highways department etc is highly
recommended – and generally free (although some LPAs charge up to £250 + VAT an hour for their time!)
3.5.4 There is a range of planning conditions which can be attached to the granting of a
planning permission – protected species surveys and archaeological digs are examples.
Any condition imposed on a scheme must be:
• relevant to planning;
• necessary to make the proposed development acceptable in planning terms;
• directly related to the proposed development;
• fairly and reasonably related in scale and kind to the proposed development;
• reasonable in all other respects.

A major planning condition which is likely to be relevant to many community led

housing schemes is the mechanism known as a section 106 agreement – which relates to
section 106 of the Town & Country Planning Act 1990 (as amended).
3.5.5 A s106 agreement takes the form of a written agreement between the local
planning authority and the person or organisation with an interest in the development of
the land – i.e the trust. They can be initially written by either the trust or the local
planning authority – but both have to agree to the final version.
There are two main issues a s106 addresses, firstly the level and nature of any affordable
housing which is to be built on the land (see section 3.5.6), and secondly the payment of
any “developers contributions” to such things as transport infrastructure and community
buildings.
However, in April 2010 the developer contributions will be included within a new
Community Infrastructure Levy (CIL). This new legislation allows for LPAs (it is
voluntary), to charge a levy on most types of new development in their area. CIL charges
will be based on a simple formula which relates the cost of the charge to the size and
character of the development. The proceeds of the CIL may be spent on local and sub-
regional infrastructure to support the development of the local area, and may be pooled
across local authority areas.
There is a provision within the legislation for registered charities being exempt for certain
“charitable” developments but at this stage the full extent of any exemption is unclear.
Most community housing developments operate on the margins of viability, it is

important to discuss with the local planning authority any potential negative impact a
required contribution could have on project sustainability. This is especially pertinent
where you can demonstrate that the provision to be supported i.e. new playground, sports
facilities is already in existence and in good repair/use.
3.5.6 Existing and future s106 agreements will continue to control the provision of
affordable housing. For trusts, negotiating the wording of a s106 can be a time consuming
– and frustrating – business. There is no substitute for expert advice on the subject from a
solicitor with specific expertise, or a planning consultant.
There is little consistency across the country on the subject and each LPA will look at
their s106 in their own way. However, there are three key areas which are likely to
impact most on a community trust’s ambitions:-
1. How the value of the property is controlled,

2. Who will be eligible to buy or rent the properties, and
3. The use of a mortgagee in possession clause.
1 How the value of the property is controlled – the definition of affordable housing
and how a value is placed against the definition is very important. Many s106
agreement are very rigid in their valuations such that they present problems to
potential homeowners re mortgagability, and trusts re their ability to secure

affordability in perpetuity. Examples of restrictive rules are such that they must
be sold at 70% of open market value, which is still likely to be too expensive
2 Who will be eligible to buy or rent the properties - a s106 aims to ensure that only
local people occupy the houses. This can present a problem with mortgage
providers who will be looking to sell the houses to anyone on the open market if
they need to get their money back from a defaulted loan. The cascade mechanism
provides time periods for when certain people should have first offer on the
houses. Generally this is residents of the local parish first, followed by residents of
the surrounding parishes and then the county. If the properties are then still not
taken up they can be taken wider. The cascade time period is usually 13 weeks
from start to finish in total.
3 The use of a mortgagee in possession clause - because the trust will invariably
need to raise some money for their scheme from the private sector (e.g. a bank),
the bank will require the ability to get hold of their money in the event of the
trust not being able to pay back the loan. The protection the bank will look for is
the inclusion of a “mortgagee in possession clause” within any related s106
agreement. The purpose of the clause is to give the bank the power to take
possession of the property and sell the housing units on the open market in order
to reclaim their money.
Because the object of the s106 is to ensure that any houses built on the site remain
affordable, most Local Planning Authorities resist the inclusion of such a clause
because if the bank took hold of the property and sold it, the once “affordable
housing unit” could find its way onto the open market.
In addition, if such a clause is not included in a s106 it can also result in

“mortgagability” problems for the potential owners in any shared
equity/ownership scheme. The issue here is that the potential owner will not be
able to raise a mortgage to buy their share because the bank, whilst being able
take possession of the house, will have less certainty in being able to sell it and get
their money back.
3.5.7 The final few thoughts on s106 agreements are:-
• If you are going to need one, start talking about them up front as they can take
many months to negotiate.
• Be aware that if the trust presents their own version to the LPA it is likely to
charge the trust for the LPAs solicitor to check it over – and undertake further
negotiations.
• There is no substitute for specific legal advice from a professional who
understands the subject.
3.5.8 The possibility of not being granted planning permission should be avoided at all
costs. If you have been talking with your local planning officers you should be able to
modify your scheme to a level that it will be supported. If planning consent is refused,
you will get the reasons in writing and then you can decide if you wish to appeal.

Appeals are judged by a planning inspector, who generally only requires submissions in
writing. If the scheme is large they can decide to hold a public enquiry. You have six
months from the date of rejection to make an appeal. Whilst there is no fee payable to
make an appeal, you will have to pay for your own legal costs which could be substantial.
There are also circumstances when you could also be asked to pay some of the LPA’s costs.
3.5.9 Having secured your planning consent, you will then move onto getting building
regulations approval. This stage of the process is there to ensure the houses you are
looking to build are going to be constructed according to various regulations and meet a
range of Heath & Safety requirements.
Building Regulation consent is provided by the Building Control Service department of

your local authority – generally they work in the same office as the planning officers. In
most cases they will assess your scheme based on the full plans submitted before you start
building. They will also conduct site visits at various stages of the construction. Fees from
the Building Control Service for this approach come in two parts: Plan Charge, &
Inspection Charge. For a ten house scheme this could be around £2,800 in total.
3.6 Buildings
Throughout this section we have talked about land. Schemes will also arise when a trust
takes on an existing residential building which requires renovation or a commercial
building with a view to conversion into dwellings. The majority of the advice in this
section will still be relevant but there may not be the need for planning consent if you are
only undertaking internal renovation works on an existing dwelling.
The opportunities for taking on an empty property should not be overlooked – in fact it
should be actively considered. According to the Empty Homes Agency there are currently
788,853 empty homes in England. In Northumberland, some development trusts have
conducted surveys of empty properties above shops. The survey focussed on town centre
locations and of the units identified the following numbers were deemed suitable for
housing: 5 Belford, 8 Berwick, 11 Wooler and 33 Seahouses.
The negative effect empty properties can have on residential areas or high streets are well
documented. Bringing them back life not only provides a home, but also achieves many of
the wider community, social and environmental objectives to which most trusts aspire.
Special legalisation has been set up to help bring empty homes back into use – such as the
Empty Dwelling Management Order4. There are also specific funding sources for projects
of this kind. If you are looking to get involved in working on empty property the
resources available at the Empty Homes Agency website - www.emptyhomes.com –
should be your starting point. You should also look at the wide range of excellent advice
to be found at a new website www.self-help-housing.org.
Most of the differences between a new build and a refurbishment project involve the cost
of the works and the process of construction, which is the topic of the next section.
4 See downloadable guide to EDMOs – at www.emptyhomes.com

4 CONSTRUCTION
4.1 Introduction
At an early stage of your project’s development you will need to think about what type of
houses (or flats) you would like to build and how they will be built. Whatever the options
taken, the Trust will employ external professionals to guide the project. It is important to
remember however, that the Trust as the client, has a responsibility to manage the
professionals and ensure they do their job.
In this section we will look at who does what in design & construction, how you can govern
your working relationships with them and options for getting the building work done.
4.2 Who does what?

In section 2.6 we raised the subject of being a good client. As a trust you will in the lifetime of
a housing scheme, need to use various external consultants. You will need to select them,
ensure they are properly appointed, make them fully aware of what you expect from them and
manage and supervise their work. As a starting point here is a summary of which consultant
does what (to find out what they may cost you, you will need to read the Money section):-
Architect – two main roles, firstly the design of the houses and secondly the co-ordination of
the rest of the design team during the construction phase.
The design part of their work comes in various stages: site appraisal, concept drawings, detailed
design for planning and then full design for Building Regulations. During the stages of this
design work they also take on the role of negotiating with the local planning authority, liaising
with the other consultants and co-ordinating other aspects of the scheme such as highways,
water, electricity, phone etc.
Their second role will only occur if the procurement route you have chosen is the “traditional”
method. Here the architect acts as the lead consultant in the administration of the construction
contract and the co-ordination of the other members of the design team. They will also
continue their design role in ensuring the builder is continually supplied with updated
drawings and instructions.
Landscape architect – a specialist working with the design of external landscape elements of a
scheme, this could include public space, pathways or green spaces.
Quantity Surveyor – in traditional schemes, their main role is to examine the designs prepared
by the architect and from them put together a list of materials and work they think will be
required to build the houses – this is known as the Bill of Quantities.
The Bill of Quantities along with the architect’s design drawings, forms the documentation
which will be sent out to builders when they are invited to tender for the work.
During the construction phase in traditional schemes, the QS prepares a monthly assessment of
the construction work done by the builder. The QS then produces a valuation certificate
which supports the builders invoice for the month.
COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – CONSTRUCTION PAGE 19

In non-traditional schemes the QS tends to provide a wider range of services linked to the cost
of the scheme – this is why they are sometimes known as Cost Consultants.
Structural Engineers – undertake a range of specialist design tasks connected with the
structural aspects of the scheme, such as foundations & drainage.
Services Engineers – sometimes referred to as mechanical and electrical engineers, they

provide specialist advice on aspects such as non-standard heating & ventilating systems.
Planning Supervisor – also called the CDM co-ordinator because their work involves making
sure all aspects of the Construction (Design & Management) Regulations are discharged. The
CDM Regulations concern all the health and safety issues to be addressed throughout the full
lifetime of the scheme.
The important thing to note here is that whilst the trust will appoint a planning supervisor to
advise them, it is the trust as the client who maintain the legal responsibility for compliance
with the CDM Regulations.
Clerk of Works – acts as an additional “quality control” pair of eyes and ears during the
construction phase. They will visit the site regularly and normally report directly to the client
or their agent/representative.
Environmental Consultants – here the term “environment” has a wide definition. If the land
on which you are looking to build used to have another use, e.g a factory or works site, then a
site investigation may be required to assess if the land is suitable for housing. These sites are
often called “brownfield” sites.
Whilst an Environmental consultant is not the same as an Ecological consultant, they may
perform the task of undertaking wildlife surveys or other similar specialist work.
Finally, if you have the need to assess your homes against the Code for Sustainable Homes (see
4.6.4), then an environmental consultant may also be qualified as a CSH assessor.
Building Surveyor – they provide a combination of advice on all aspects of property and
construction. They can be involved with new buildings or the refurbishment and performance
of existing buildings. The nature of their work may range from the design of large, multi-
million pound structures to modest adaptations and repairs, and sometimes includes working
with buildings of architectural or historic importance.
For trusts, they could be a useful starting point when looking at refurbishment schemes as
outlined in section 3.6
Independent Certifier – a job normally performed by a surveyor or another suitably qualified

professional and only applicable if an HCA grant is involved. The role is required to provide
the HCA with independent confirmation that the works have been satisfactorily completed to
the standards agreed – see section 4.6.3-4.6.4.
Employer’s Agent – in most of the consultant jobs referred to above mention has been made of
the “traditional” procurement method. An employer’s agent is used mainly with the other
main procurement method, “design and build”.

It is a job with no exact definition – part technical adviser, part construction consultant, part
project manager, part contract administrator and part cost manager. Their background is likely
to have been as either an architect or a quantity surveyor.
Project Manager – for trusts with staff, one staff member should be given the clear role of
managing the project. For trusts with no staff, either the voluntary board will collectively
perform the role – in addition to the role as the client - or they may choose to appoint an
external consultant.
The project manager role should be seen as the single focal point through which all external
consultants are co-ordinated and the project progressed.
If a trust is using an employer’s agent, then some of the project management role can be added
to his/her workload. The pitfall to be avoided here is that the trust – the client – must be clear
exactly what project management work will be delegated to the EA. Some of the work and the
decision making process has to remain under the trust’s direct control.
4.2.1 Some trusts have used the development services of a housing association. The larger
housing associations will have some of the roles described above already employed within
their staff team. Others will simply bring them in as external consultants as and when
required. The main area of “consultant support” on offer from a housing association is that of
an overall development service. This can be seen as a kind of pick’n’mix opportunity allowing
access to a range of skills and advice they have at their disposal.
In all of the known cases, trusts have used a housing association’s development services when
it has been linked to an HCA grant, but this does not always need to be the case. Even if a trust
is not intending to use a HCA grant in their project, it could still benefit from contracting with
a housing association for their development services.
The levels at which you could work with a Housing Association may require differing
contractual arrangements. As a starting point you could consider using a simple form of a
Memorandum of Understating (MoU).
A MoU is a document used to convey and articulate a written mutual agreement between two
or more parties. The document is not as binding as a contract but outlines a commitment
between the parties to work together collaboratively toward the same purpose or goals relating
to the use of shared resources or services. MoU’s do not normally discuss the exchange of
monies. MoU’s are especially helpful for non-profit organisations who would like to formulate
partnerships and provide an exchange of supportive services. (See Resource E for examples)
Further down the design and construction process a contract can be agreed as outlined in the
section below.
Housing Associations may also have a role to play in the future management of houses – this is
covered in People section 6.4.4

4.3 Writing a Project Design Brief

A design brief is your statement of requirements, a written explanation given to a designer
(architect) outlining the aims, objectives and milestones of a design project.
A good brief will evolve. You as the client should write the first version and then with the
external support you bring in, help it develop into the finished article. Whilst you should write
in a clear, concise way, there is no reason why you cannot use emotive language to emphasise
exactly what you are trying to achieve.
A thorough and articulate design brief is a critical part of the design process. It helps develop
trust and understanding between the client and designer and serves as an essential point of
reference for both parties. It should not seek to be prescriptive about exactly the design
solution you want – that is what the design team does.
Resource F expands on what could go into a Design Brief
4.4 Consultant Selection and Appointment

Community trusts work predominantly on trust. They know who they like to work with and
keep the documentation to a minimum. Trusts are not alone in this, architects have been
known to work with housing associations for 20 years and only ever get a letter telling them
the fee they were paying on a “take it or leave it” basis. We all know it should be a bit better.
4.4.1 Most of the consultants mentioned above have professional bodies and associations
which they join. These trade bodies often produce guides to help you select one of their
members e.g. Chartered Institution of Building Services Engineers, Royal Institute of
Architects (RIBA), Royal Institute of Chartered Surveyors (RICS). Some of the guides are
downloadable from the internet – others you need to pay for.
4.4.2 The trap some trusts fall into at an early stage is bringing in a consultant they know
and then finding they are “obliged” to stick with them on the full journey of the scheme - even
though they may not be the ideal choice.
Choosing the right architect is one of the most important decisions you will make. Guidance
on the subject can be found from the website of CABE, the Campaign for the Built
Environment (see free download Selecting Design and Development Partners). This is what
CABE have to say on the subject:-
Choosing the right architect or designer is a critical decision. Proper time and attention must be
given to the selection process and to making a choice that will lead to a good working partnership
with a skilled design team able to understand client objectives. Generally, the approach should
focus on using a structured selection process to choose a designer or team rather than a building
design, as arriving at an appropriate design needs time and mutual acquaintance.
Clients should look at a wide range of design expertise before making a choice. Visiting buildings
designed by the people being considered is important. It is rarely a good idea to employ a firm
merely because a friend manages them, they are local, or you have used them before. A
competitive selection process allows you to review a range of available services and select the one
best suited to the project and organisation. However, clients also need to guard against asking for
large amounts of unpaid work from prospective designers as part of the selection process.
Should the choice lead to a young, possibly less experienced practice, teaming them with a
contractor with a good track record in an integrated team may provide the right way forward.

A suggested process would be to:-

• prepare a brief showing what you plan to do and want out of the architect
• send it to at least 5 architects
• short list – you may have a clear winner
• interview – using the same group who made the short listing
• be prepared to do it all again if you are not satisfied you have the right person
Resource G is an extract from an architects brief. It focuses on establishing the quality of the
prospective architect first – and then looks at the cost. One of the architects who tendered for
this work commented in their covering letter, “Can I take the opportunity to thank you for the
way you are conducting this invitation to tender. As a practice we are constantly applying for
projects, especially in the current very difficult economic conditions, your pro-forma questions
came as a breath of fresh air. It has been a pleasure to respond.”
One last point is ensuring that the architectural practice has the capacity to do the work you
are asking in the timescale you have set.
4.4.3 Under the traditional procurement route, following the selection and appointment of
the architect, it is often the case that they bring in the other consultants required, such as the
quantity surveyor, structural engineers etc. This is an acceptable process but the trust should
ensure that they make the appointments rather than allow the architect to take them on as
sub-contractors.
4.4.4 Architects and quantity surveyors, if asked nicely, will often work in the initial stages
of a project “at risk”. This could mean that they undertake a quick site investigation, prepare
some outline sketches and give a basic project cost for free.
This arrangement may work out well, but trusts should be aware of some of the shortfalls of
working in this way. Free work might not be the best of quality. Often it is hard to chase
people to deadlines when you are not paying them. Equally, you may feel obligated to
continue to use their services when you have money to pay, although they may not be the best
person for the job.
A better arrangement might be to work at the start at an agreed ”low risk” fee – 50% discount
on the normal day-rate or a fixed fee. This low risk approach can reflect the fact that the trust
is not flush with money and just exploring options, but is willing to start to develop a
professional relationship between the two sides of a contract. One which can be built upon if
the project develops into a full blown scheme.
4.4.5 It is good practice to formally set down what exactly you want your consultant to do
for you, what you expect at the end (deliverables), in what timescales, and for what price. As
mentioned above, many consultants’ trade bodies have standard letters for small contracts
which they can complete and send to you. At the top end you can purchase construction
industry standard contracts – known as JCT (Joint Contracts Tribunal) – they are meaty
documents !
Another example is the Association of Consultant Architects (ACA), the national professional
body representing architects in private practice - consultant architects – who range in size

from one-person firms to very large international organisations. They also have document
templates which can be paid for and downloaded from the internet (www.acarchitects.co.uk).
At the initial stage an appointment letter should be sufficient to start the process. The letter
should set out clearly the services you are buying, what you want at the end of the service, the
price you are paying, when you want it by and who will own the end product. Including
mention of insurance cover, how the service can be ended and how you expect each party to
behave is also good practice.
Resources H1 and H2 are sample contract letters which can be adapted by you to suit your
particular circumstances. It is important to remember that whatever the length or complexity
of the letter, you as a trust are entering into a contract and you should always consider taking
legal advice on the subject.
4.4.6 You are now at the stage where you have selected your consultants and set down in
writing what you want from them. Good communication from now on is essential. It should
never be taken for granted that you think they know what you want – you need to tell them,
and when appropriate put it in writing. All too often from the time of appointing a consultant
trusts can react as if they have handed over the responsibilities to someone else and relax a
little (or a lot). It is important to remember this is your project and you must remain at the
helm steering it – not letting someone come in and take control.
The importance of an initial brief has already been stated. But providing briefings does not
stop there. If something changes - land size shrinks, deadlines move, access changes, quality
objectives raise etc - or you reach a stage when you look back at the original brief and see it is
out of date – do another one or issue an update.
4.5 Procurement Routes

Procure: obtain by care or effort, acquire. There are a number of procurement routes to choose
from which will lead to your houses being built. Reference has already been made to the main
two; the Traditional” way and “design and build”. Resource I s an extract from the “Making it
Happen” chapter of the Community Land Trust Practitioner’s Guide and gives fuller
information on the various procurement routes. In summary, they are:-
Traditional – the architect, assisted by specialists, designs the scheme. A QS works out the
price and prepares documents which are sent to builders who will tender for the work. The
chosen builder (the contractor) then builds the houses to the agreed design and price.
Variations to the price can occur. The architect now takes on and co-ordinates the rest of the
design team during the construction phase.
Design & Build – this route allows for some of the design element to rest with the contractor.
An architect is still generally used to complete the initial designs up to the planning stage
(RIBA D – see 4.6.1). From this point on the contractor is appointed to not just build the
houses but also to complete the full design requirements. The further design stages can of
course still be undertaken by the original architect but via the contractor. The “design & build”
contractor is still recruited by an open tender process. This route is likely to involve the trust
employing an Employer’s Agent (see section 4.2)

Turnkey (off-the-shelf) – this route involves no contract with a builder or a designer. The trust
simply agrees with a homebuilder that they will buy a number of houses when they are built
(in the same way most people buy new homes). Depending on the agreement (contract) with
the builder, the trust may be able to influence some design and quality issues.
4.5.1 Green Building

Having full control of a scheme allows the trust to dictate the level of environmental building
techniques and materials used in any housing scheme. This could range from stipulating higher
energy efficient materials and heating/lighting systems, to the more ambitious models such as
eco-homes and the use of materials such as straw bales. Many of the projects being delivered
by trusts have high environmental standards and this is developing into a niche market for
community led organisations. If you need ideas or advice take a look at what the Ecos Trust are
doing - www.ecostrust.org.uk.
4.5.2 If you follow either the traditional route or design and build, at some stage the trust
will be involved in selecting a builder (contractor) to build your houses. After the appointment
of the architect this is the likely to be the next biggest decision you will make.
On the subject of selecting a contractor, the list below is taken from the National Housing
Federation’s guide to Developing Affordable Housing and is a good set of points to consider in
making your selection:-
• The quality of previous work being undertaken (determined if

necessary from site visits and references)
• Site management and administration resources - how the builder's
management team is organised
• Financial standing (bank references, audited accounts and a report on
financial status obtained from a reputable agency)
• References from other clients, preferably housing associations
• Commitment to diversity and equal opportunities
• Ability to obtain performance bond
• Availability of NHBC1 or similar warranty.
4.5.3 Often a trust will desire to employ a “local builder” although in rural areas the
definition of local could be a wide one. It is important to remember that the money you will
be spending on building your houses could inject a large amount of money into the local
economy.
The use of a system called Local Multiplier 32 (LM3) is a way of identifying where the money
you spent was re-spent at two further “spend levels”. As a quick example, when the Glendale
Gateway Trust spent £45,000 renovating a single three-bed house in Wooler, Northumberland.
They worked out using the LM3 process that it was worth £129,000 to the local community.
(see Resource J for more details).
1NHBC, the National House-Building Council, is the standard setting body and leading warranty and insurance provider for new
and newly converted homes in the UK.
2 See www.pluggingtheleaks.org and www.lm3online.org

4.5.4 The process of inviting builders to tender for the work will be undertaken by the
consultants you employ – normally the quantity surveyor. As the client you have a role in
making sure the tender process is conducted in a proper way. When the tenders are returned
they should be properly recorded and kept secure. All tenders should be opened at one time
with witnesses. The consultants will present the trust with a recommendation which should
be supported by sound reasoning and evidence. The process undertaken and the result should
be formally recorded.
4.5.5 A cautionary tale. As trusts up and down the country have been developing their
housing schemes, a number of instances have arisen where they have been prey to the energy
and enthusiasm of developers. In a lot of cases the developer has been involved in a new
building method linked to green eco-homes or off-site kit construction. Naturally, community
led trusts are often very interested in this type of low-impact, environmental way of building,
- and this is encouraged. However, trusts need to exercise caution before they leap into
relationships which could be untried, untested and based on weak contractual arrangements.
There is also the danger of the developer taking on too much control of the scheme to the
detriment of you, the client.
4.6 An Introduction to Design

Whilst you as a trust will not be designing the houses, you will be employing consultants to
undertake the task on your behalf. As you may have picked up already, a reoccurring theme in
this guide is the message that you, the trust, are the client, and as such you will need to
manage and oversee the design process. This section therefore introduces some basic design
issues of which you should be aware.
4.6.1 If you have been involved in any form of construction project you may have seen or
been guided by RIBA Work Stages3. As a starting point it is useful to get an understanding of
the stages and the language used to describe the work tasks connected with each stage.
The aim of the list is to organise the process of managing and designing building projects, and
administering building contracts, into a number of key Work Stages. The sequence of the
Work Stages may vary or they may overlap to suit the procurement route chosen.
RIBA Work Stage Description of key tasks

Identification of client’s needs and objectives, business case and possible constraints on development.
Preparation
A Appraisal Preparation of feasibility studies and assessment of options to enable client to decide whether to proceed.
Development of initial statement of requirements into the Design Brief by or on behalf of the client
B Design Brief confirming key requirements and constraints. Identification of procurement method, procedures,
organisational structure and range of consultants and others to be engaged for the project.
Implementation of Design Brief and preparation of additional data.

Preparation of Concept Design including outline proposals for structural and building services systems,
C Concept
outline specifications and preliminary cost plan.
Review of procurement route.
Design
Development of concept design to include structural and building services systems,

Design updated outline specifications and cost plan.
D Development Completion of Project Brief.
Application for detailed planning permission.
Technical Preparation of technical design(s) and specifications, sufficient to co-ordinate components
E Design and elements of the project and information for statutory standards and construction safety.
3 Royal Institute of British Architects - www.architecture.com

F1 Preparation of production information in sufficient detail to enable a tender or tenders to be obtained.
Pre-Construction
Product
F Information
Application for statutory approvals.
F2 Preparation of further information for construction required under the building contract.
Tender Preparation and/or collation of tender documentation in sufficient detail to enable a tender or
G Documentation tenders to be obtained for the project.
Identification and evaluation of potential contractors and/or specialists for the project.
H Tender Action
Obtaining and appraising tenders; submission of recommendations to the client.
Letting the building contract, appointing the contractor.

Construction
J Mobilisation Issuing of information to the contractor.

Arranging site hand over to the contractor.
Construction Administration of the building contract to Practical Completion.
K to Practical Provision to the contractor of further Information as and when reasonably required.
Completion Review of information provided by contractors and specialists.
Administration of the building contract after Practical Completion and making final inspections.
Post Practical Assisting building user during initial occupation period.
Use
L Completion Review of project performance in use.
The activities in italics may be moved to suit project requirements, ie:
D Application for detailed planning approval;

E Statutory standards and construction safety;
F1 Application for statutory approvals; and
F2 Further information for construction.
G+H Invitation and appraisal of tenders
4.6.2 The management of the design process covers the RIBA stages A-E. From a trust’s
perspective the basic design management stages are:-
Doing some “clear-sky” thinking and

setting down in a clear Brief what it is the
trust wants to achieve. It should ask the
design questions – not be prescriptive on
the answers – that stage is ahead.
Using the Brief, recruit a design team who you think will
find the best design to achieve your objectives.
Working with your design team, provide enough time, support and
encouragement so that your design team can prepare the best set of options.
Consider the options the design team present. Agree on the best options or ask for more.
Go back and check if it delivers the original Brief - or the updated version.
Support the process of preparing the concept drawings and when required “sign off” the concept design.
On entering the design development stage, continue to support the design team by providing timely decisions and
clear instructions as they move towards full planning application submission.
During the construction phase, design changes not finalised before building began, will be brought to the trust for
approval. It is important that decisions on these changes are made quickly to avoid costly time delays.
4.6.3 During your time managing the design process of your houses you will hear many
terms describing various design standards which may need to be taken into account. As
outlined in section 3.5, all of the houses you are planning to build must have obtained
Planning Consent & Building Control Approval from the Local Authority. In addition, they

will meet the Health & Safety legislation under the Construction (Design & Management)
Regulations.
If as part of your funding package you are going to use public subsidy, normally in the form of
a grant from the HCA, then there are additional design requirements which must be met.
For developments not requiring HCA funding the requirement to follow the guidance outlined
below is entirely voluntary. There may be schemes initiated by trusts in which only some of
the houses are HCA funded & others not. The design & assessment required of such schemes
will require clarification with the HCA at an early stage.
4.6.4 The guiding requirement is that the homes must score sufficient points when measured
against the Housing Quality Indicators. The individual elements of the HQI come from a range
of inter-related design standards publications.
Standards & Quality in Development, a good practice guide - Published by the National
Housing Federation, This is a guide to the process of delivering good quality social housing &
includes physical standards which have been adopted as the minimum acceptable for HCA
funded developments. Last updated in July 2008.
Code for Sustainable Homes (CSH) - Published by the Department for Communities & Local
Government. This was introduced in 2007 & replaces the earlier "Ecohomes" scheme and is the
means by which the target, set for 2016, of all new homes being "Zero-Carbon" is to be
achieved. The Code assesses homes against nine design categories to produce a rating on a scale
from Level 1 (10% above Building Regulations minimum standards) to Level 6 (Zero-Carbon).
The current minimum standard for HCA funded schemes is Level 3 rising to Level 4 in 2012.
An Assessor, registered with the Building Research Establishment4, is required to validate

which CSH level the design meets, both before & after construction. The Assessor's fee needs
to be allowed for under the total costs of the scheme as will any additional requirements that
arise out of the Assessment such as Ecology Surveys of the site or acoustic testing of the
completed houses. The CSH does not currently apply to Scotland & is in the process of being
introduced into Wales & Northern Ireland
Lifetime Homes - Achieving a good rating under the Code for Sustainable Homes requires that
the houses should be built to Lifetime Homes standards. These are published by Habinteg
Housing Association in London & are summarised in the "16 criteria" which deal with matters
ranging from car-parking to the location of light switches & are intended to facilitate the use
of a house by a resident or visitor with a range of disabilities. They also encourage the design
of houses that can be easily adapted to meet the future needs of residents as they become
elderly or infirm. It should be noted that the Standards & Quality in Development also deal
with these matters but in a rather different way.
Secured by Design - is guidance published by the Home Office & administered through the
local Police Force. It intends to deal with the means by which housing can be designed to
reduce the risk of burglary & anti-social behaviour. It is most useful in the layout of larger
housing developments but also sets minimum standards for door & window fittings.
4
www.breeam.org or www.bre.co.uk

Under the Housing Quality Indicator assessment unavoidable shortcomings may come to light.
Waivers for these items can be applied for & if approved by the HCA will form part of the
scheme as it goes forward. Any waivers need to be applied for in writing.
Once the building work commences on-going inspection and assessment of the standards &
quality of the actual houses in comparison to the original intention must be carried out. Any
discrepancies need to be highlighted and rectified as soon as possible to avoid problems that
have to be dealt with later on.
4.7 Self-Build
There is often interest in self-build options when trusts start to look at what can be done on a
development site. One of the early CLTs, St Minver in Cornwall, built 12 detached bungalows
which ended up being built for just £77,000 (2 bed) and £85,000 (3 bed) - just 26% of the price
of the same house if it where on the open market. Such savings can help enormously in
making a scheme financially viable. As a rough guide, the labour cost of a self-build project
amounts to between 25-40% of the build cost. On self-finish schemes the saving is about 15%5
There are organisations who support self build, such as the Community Self-build Agency
(www.communityselfbuildagency.org.uk), the National Self-build Association (www.nasba.org.uk)
and the Walter Segal Self-build Trust (www.segalselfbuild.co.uk).
4.8 Refurbishment schemes

As outlined in section 3.6 bringing back to life existing buildings is a good option with the
potential of multiple rewards. Many trusts have become involved in the spaces above retail
units. These types of schemes can have more of an economic regeneration side to them,
especially if they are in town centres.
In tackling these types of projects, trusts report issues of fragmented ownership that span
across private interests, various public housing providers and other public services such as
utility companies and often they have difficulty in ascertaining ownership at all! If a project is
aimed at renovating a number of properties, trusts have found it useful to design a proactive
and flexible response to working with the different types of owners. In for example, partnering
with a housing provider to access Temporary Housing Grant6 and working with a local
authority empty property officer to ascertain ownership and work through the process of
empty dwelling management orders.
In areas of low property value, purchase and repair can be an attractive option, bringing
substantial benefits to local communities. Empty properties stall regeneration initiatives and
scar communities heightening fear of crime and discouraging people from feeling good about
the place they live in. Development trusts are motivated to address the above issues, whilst
providing employment and training opportunities, affordable housing and in appropriate
circumstances, open market housing to improve tenure mix.
5
Lessons from the first 150 Homes – National CLT Demonstration Programme 2006-08 evaluation report.
6
Temporary Social Housing Grant is available from the Homes & Communities Agency and provides funding to bring back into
use properties, in public or private ownership, which would otherwise remain empty and unavailable for social housing. Trusts
will need to partner with a housing association to gain access to TSHG.

On a larger scale, the redevelopment of ex-industrial sites can be the catalyst for major
schemes linking in a raft of regeneration support.
Consultant support in relatively small schemes will vary depending on the type of
refurbishment required. Generally, a building surveyor can perform the role of both architect
and quantity surveyor. In other cases the builder can directly provide the design element of
the works.
Refurbishment projects can involve additional challenges during the construction phase as
they often involve difficult access issues, dealing with neighbouring properties and negotiating
work to adjoining walls etc. Often there is also a Heritage building element to a scheme, or it
could be that the property is in a conservation area. Often however, issues such as these open
up additional funding opportunities which will be discussed more in the next section.
4.9 Continued Client Responsibilities

There will come a time when after possibly years of talking about the scheme the “start on
site” date looms. There will be pressure to get going which could be driven by financial issues,
the availability of the builder or environmental factors such as not disturbing nesting birds!
Before getting carried away and signing the contract with the builder, the trust and the lead
consultant who will be administering the builders contract (architect or employer’s agent) will
come together to ensure everything is in place. Are all of the approvals in place, is the money
in the bank or to-hand, have all insurances been taken out - the list is long but the trust should
be well guided by their consultants.
4.9.1 Before work starts on site, there will be a pre-start meeting which everyone involved
in the project should attend. It is important that whoever represents the trust, be it a trustee
or a staff member (project manager), knows about the project and is signed up to attend all
future site meetings so as to keep abreast of progress. As the client there will be times when
everyone will look at that person for a decision or guidance.
The pre-start meeting (also known as pre-contract) is the time to set everything in place and
complete a long list of checks. It is no good assuming everyone knows something – this is the
time to make everyone fully aware. The trust’s lead consultant will have a checklist of issues to
address during this meeting.
Once all final checks have been made and contracts signed, the contractor will be given
possession of the site as theirs during the construction phase. The trust will take back
possession once the houses are built.
4.9.2 A schedule of regular site meetings will be agreed at the pre-start meeting. These
meetings (generally every month) will be the main place for the trust to maintain its role as
the managing client.
Changes are inevitable and will generally affect either cost time or quality. All changes that
arise will be presented to the trust and they are likely to be asked for a quick decision on how
to respond to the need for change. When changes are made they will be recorded by a
consultant so that a complete record is maintained. These are known as an Architect
Instruction and follow consecutive numbering. The affect on cost should be carefully
monitored (see Money section 5.6).

At the site meetings the CDM co-ordinator will report on any issues which have arisen. To re-
emphasise the point made in section 4.2, whilst the trust appoints the CDM co-ordinator, the
responsibility still remains with the trust as client, so the trust’s representative needs to ensure
they are in agreement with the contents of the CDM’s report.
The builder will present a written report to the site meeting. This will indicate how work is
progressing against the agreed programme in their contract. It is also the opportunity for them
to put in writing additional information they need to keep to the programme. Whilst it will
not be the client’s responsibility to provide the information – it will go through the lead
consultant - the trust may need to make a decision before the information can be passed on. It
should therefore ensure that decisions are taken quickly and all information requested by the
builder is provided as soon as possible so as to avoid costly delays.
4.9.3 The payment of invoices and builders retention is covered in the section 5.6. Trusts
should be aware of the ever growing issue of insolvency. Making sure you perform credit
checks etc before appointing may reduce the risk but will not eliminate it. The contract you
sign with the builder will give guidance on what to do, and the lead consultant (architect) will
be able to guide the trust though the process. If it is the consultant who becomes insolvent
then you will need to take legal advice quickly.
4.9.4 The final stage covered here is the handover – not just something that happens, but a
stage in the life of a housing project that brings with it many issues to consider.
As the building works near completion and the finish trades (decorators, landscapers, painters
etc) start work, the handover date should be set – hopefully it will be the same end date on the
original contract programme. Before the handover date the trust will be involved (with their
lead consultant) in an inspection of the houses to ensure they are satisfactory. The builder will
have by then completed a “snagging list” of jobs to be completed. The trust and its lead
consultant can add to this snagging list. As the handover date nears, extra effort will be
required to ensure all items on the snagging list are fully addressed.
Paperwork will come to a head as the handover date arrives. The trust will be handed the
CDM’s health and safety files and a pack of information on how the homes work - such as
heating instructions, equipment manuals and product guarantees.
As on the start on site date when the trust handed over the site to the builder, on the handover
day, the builder hands the site back to the trust. This means that from this point on the trust is
responsible again for things such as insurance and security.
It will be someone’s fault if the handover date is missed - either the builders or the clients. If it
is the builders, the client can claim damages for breach of contract. If it is the clients, the
builder will first seek an extension to their works programme and then request from the client
some more money for having to stay on site longer than budgeted for. Delaying the handover
date is therefore something which should be avoided!
On the date of handover the defects liability period clock starts. This is generally a 12 month
period during which time the builder is required to come back onto the site and remedy any
defects.

To encourage the builder to come back and do the work the client holds back half of the
builders retention monies (the other half being paid to the contractor on the handover date). If
the builder will not come back onto site, the client can use the money to get someone else into
do the work.
At the end of the 12 month period a certificate is issued to say all is well (if it is), the retained
monies are paid to the contractor and the lead consultant will draw the final accounts to a
close.
4.10 Planning Ahead

This section has dealt with design and construction issues ending in the handover of the
completed homes to the trust. Long before this handover date the trust will be preparing for
what it is going to do with the completed homes. The main options are either to rent them out
or sell a part of them. These issues are covered in chapter 6, People.

5 MONEY
5.1 Introduction
The subject of financing your project is likely to be the biggest challenge you will face.
Equally, it is an ever-changing one, dependent on such factors as a fluctuating commercial
lending market and developing public policies.
In this section we will look at the financial aspects of your scheme including subjects such as
project costs, sources of income and Business Plans. Because these issues are not relevant to
just housing schemes, it is assumed that an existing trust will have a good level of knowledge.
Additional information on the subjects covered can be found in the DTAs guide to asset
development, “To Have and to Hold”.
5.2 Feasibility Considerations

willl it be financially
Uppermost in any trust’s thoughts throughout the lifetime of a project is wil
viable – can you raise the money to do it, will the end result bring in sufficient funds to keep
it alive in the future.
5.2.1 Before we look at money, it may be worth considering some non non--financial questions?
Does this proposed housing scheme fit in with the overall objectives of your trust? Do you
have the skills and resources to take it on? As a new venture, is this really something you
should be getting into?
5.2.2 At an early stage you will start to investigate the feasibility of your ideas. This
normally involves a basic assessment of what you want to do, how much it will cost and how
you will pay for it. The cautionary note here is how many of the figures used are estimates –
or guesstimates, and what effect this will have on your bottom line. Through the trust’s
existing community network – builders, architects, book-keepers etc - it may be able to start
this process. In addition, it can call on the help of DTA staff, housing enablers or CLT
workers. As your scheme develops it is likely an architect or general construction consultant
will be required to help.
5.3 Costs
Predicting normal project costs is fraught with problems. There are so many variables that
there needs to be a severe health warning attached. The information below is based on the
likely costs of a fictional 7 house scheme.
Land – the cost of each plot on which the trust wishes to build will vary enormously
depending on the source. Ideally it will come as a free gift or as part of s106 deal the trust has
been able to get involved with. If it is a rural exception site the cost of each plot should be
around £5,000, although instances of higher figures are becoming more common. If the site is
in an area where there maybe more competition or getting a deal is harder, the trust may
need to pay up to £15,000 per plot.
COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – MONEY PAGE 33

Building costs – as a starting point the building costs are generally worked out at a per square
metre cost. As the design details progress, the QS will give more accurate figures to work
with. The next cost analysis comes when the builders tender for the work and you agree the
contract sum. The final cost will depend on changes which have occurred during the
construction phase
House Details No Size m2 Cost m2 Cost of unit Total Cost

2-bed house - 2/3 person 2 65 1,050 68,250 136,500
2-bed house - 4 person 2 75 950 71,250 142,500
3-bed house - 4 person 3 90 900 81,000 243,000
Total 522,000
5% Contingency 26,100
Builders Contract Sum £548,100
The contract sum on the contract with the builder will still include some provisional sums for
unknown items such as the cost of gas, electric and water works which will not be finalised
until the utility companies concerned agree the standard of the works required.
Common areas – schemes which involve flats or more complex community spaces, often
include common areas such as corridors, lifts, staircases, and storage space. These are normally
added on top of the living m2 calculations but at a lower rate. They can add around 10-20% to
your total build cost.
Infrastructure costs – depending on the scale of your project you may need to pay for major
access roads, landscaping etc. These costs will normally be outside the builders costs and be
provided by a separate contractor. The price will be dependent on the scale of work required.
Consultant fees - these are generally calculated as a percentage of the contract sum – or more
accurately the actual build cost. They can be fixed to the contract sum but generally they get
adjusted at the end of the project when the actual build cost is agreed. They generally work
out to between 10-12% of the contract sum.
Remember not every scheme will need every consultant listed, and the % amount shown is
open to negotiation. Many housing associations, who have long-term relationships with
consultants, will be able to get a full fees package for around 8%.
Whilst a community trust is unlikely to be able to negotiate in the same way, there are
consultants who understand the wider community outcomes you are trying to achieve and
reduce their fees accordingly. The use of a fixed fee instead of a percentage figure is also an
option. In the table over we have set some % figures which we will use later in this section.

Consultant % Cost VAT Total Notes on fee payments

payments
Architect 5 27,405 4,796 32,201 Fees payable in stages - 35% at Planning
Between 5-6% submission, 40% at Start on Site, 25% at
Completion
Quantity Surveyor 2.5 13,703 2,398 16,100 50% of fee paid when tender for builder
Between 2-3% completed. Remaining in instalments. over
construction period.
CDM co-ordinator 0.5 2,741 480 3,220 Can be the QS – payment by agreement
Less than 1%
Structural Engineer 1 5,481 959 6,440 50% at Start on Site, 50% on completion
Up to 2%
M&E Engineer 1 5,481 959 6,440 Payment on agreement
Up to 1.5%
Landscape Architect Payment on agreement
Between 1-2%
Employers Agent Fee for Design & Build routes will replace
some of the above fees
The trust may also factor in the cost of a project manager which could be anything between
3-5% depending on the length of there involvement.
Legal Fees – there are a range of legal works which could come up. Ideally you should try to
work with one solicitor who has all the expertise for all the tasks. All legal fees will be subject
to VAT.
Legal work Fee Notes on fees

Securing an “option to purchase” the land £750 Will be dependent on whether it
is conditional to planning consent
Land purchase – conveyance, searches etc £1,000 It is likely to depend on size and
complexity of the deal
Land development issues such as a access to £250 each Maybe part of land purchase fee in
highways agreement and agreement to link up into some cases
public sewers
Negotiation for a s106 agreement £1,000 Could be an extended fee if very
complex
Satisfying bank requirements re taking on a loan £500 Again, depends on complexity
Planning & Building Regulations - Planning application fees are around £335 per dwelling. A
submission for Building Regulations costs around £100 per dwelling (subject to a minimum
fee of £400) and around an additional £1,000 for site visits.
Archaeology – if a dig is required you may pay in excess of £3,000 and another £250+ a day if
their attendance is required during times when foundations are being dug.
Demolition – removing structures and preparing the ground for a clean start can be expensive,
especially if you are in a conservation area or there is the possibility of contamination such as
asbestos. As an example, Allendale Community Housing in Northumberland have been
quoted £15,000 to remove existing buildings on a site on which they hope to build 4 houses.

Bank charges – unless you are lucky and get the offer of an interest free loan from your local
authority, you will need to pay for an arrangement fee for a bank loan (1%) and the cost of
the loan over the time the houses are being built. Normally there is the option to repay the
interest only during the construction phase, and then start paying towards the capital amount
once the houses are built and you have either started renting them out or are realising some
equity via a share-ownership scheme. The interest only repayments for a 9-12 month period
could add between 1.5-3% onto your overall project costs
5.3.1 If your scheme is going to involve an HCA grant, there will be additional costs to pay.
5.3.1
As is explained in Resource A, if you are looking to access a grant from the HCA you will
need to be “Qualified” with them in some way. Getting this qualification is likely to involve
the trust partnering up with a Housing Association who will provide a level of development
experience that the trust does not possess. The “development role” the housing association
performs is likely to vary from project to project, but could amount to around 2% of contract
sum (+VAT).
There will also be additional work required connected with the assessment requirements of
the Housing Quality Indicators and the HCA grant agreement. (see 4.6.4).
Independent certifier – the cost will be around £3,000.
Code for Sustainable Homes Assessor – around £3,500 dependent on the number and variety
of houses
Legal work - a legal opinion that your trust fits the definition of a CLT as in the Housing &
Regeneration Act 2008, around £500. Legal reports connected with the grant offer letter,
around £2,000.
Surveyors report – one other piece of red tape the trust may need to go through is that under
the Charities Act, the charity needs to obtain an opinion from a chartered surveyor that any
disposal of the charity’s property (and the grant of the HCA Rentcharge1 is a disposal), is on
the best terms available to the charity in the circumstances. This avoids the need to get
specific consent from the Charity Commission. The cost of this opinion is generally around
£500.
3.2 Refurbishment cost

5.3.
5.3.2 costss can often be incredibly variable. Normally, if the building being
renovated is in a poor condition and the works involve a complete strip out new roof etc, the
cost per square metre is likely to be more than a new build scheme – around £1,000m”. If the
building just needs internal fitting out, the cost could fall to half this price.
Some savings can be made on refurbishment schemes due to the reduced need for any many
consultants – and their fees. However, the contingency budget is normally 10% as against 5%
for new builds.
5.3.3
5.3.3 There is a saying, that if you ask three VAT advisers for advice, you will get four
different answers. VAT on housing projects if the houses are new build is reasonably straight
1 The Rentcharge is the charge the HCA put on the properties built using a HCA grant. – see Resource A

forward. VAT on new residential buildings is zero-rated. In addition, if work was required to
demolish buildings and prepare the site in anyway, VAT is not applicable if the work directly
relates to the new build.
Working on existing buildings is more complicated. As a very rough guide you should budget
for having to pay the standard rate of VAT on all the works and fees. However, there are
possibilities for reducing the VAT burden, the exemptions are generally connected with the
use of the building, any disabled access issues and if the building is listed.
Renovating
Renovating or restoring an existing dwelling will not qualify for reclaiming VAT paid out,
unless the property has been empty for the last ten years - in which case it will be treated as a
conversion. Certain conversions are eligible to reclaim VAT, this includes conversions of
non-residential buildings into a property for residential use. Examples may include barn
conversions and business premises conversions.
If the dwelling has been unoccupied for at least the last three years, the rate could drop to 5%
providing the work is handled by a VAT registered builder – again you need to take advice.
There is no DIY VAT refund scheme for renovations equivalent to the one for self-build and
conversion.
Experience shows that unless you as a trust seek advice on the subject, the contractors you use
will simply charge standard rate VAT on everything. If you put in the work to research the
subject you may get the rewards.
self--build schemes there is the one-off opportunity within three months of practical
On self
completion to reclaim VAT on certain goods if the new house is a private residential
residence. Having proof of VAT paid from VAT registered suppliers is vital.
VAT is not normally reclaimable for, professional fees, hire of plant, scaffold and machinery,
furniture, carpets, curtains, white goods, trees and plants and burglar alarms. HM Customs &
Excise publish a guide (www.hmce.gov.uk) – but the likelihood is that you will still need
expert advice on the subject.
5.3.4 A question which often gets asked is what is the cheapest procurement route? In the
options outlined in section 2 (“traditional” and “design & build”) there is no clear answer. In
the majority of cases the traditional route can come out cheaper, but the design and build
route provides better cost certainty from the start. The increasing popularity of the design and
build route – often using an Employers Agent – is producing reduced costs on fees, which can
be reduced from 10-12% to 8-10%. But the key question is, what is the effect on the contract
price from the builder?
The use of the off-

off-the shelf (turnkey) option is a big winner regarding the need to manage the
design and construction and handle the cash-flow risks. The individual cost of each unit
could be more expensive, but this will not always be the case as the developer will be able to
keep costs lower than a small trust. The cost objective in this type of model is working with a
developer who is willing to agree the profit level they need, the trust fixing the sale price and
then making a judgment on a “best value” option.

5.4 Income
On the other side of the balance sheet is the income you will need to cover your costs. If you
are a trust who has been used to getting grants to develop you capital projects, then funding a
housing project is likely to present you with a new challenge.
5.4.1 As a starting point, the table below splits the delivery of a typical small housing
project up to the completion of the building into 3 separate phases and shows beside each
phase the typical amount of money you may need to move the project onto the next phase
(assuming you have already spent the money in the previous phase). Remember these are only
basic guide figures and project costs will vary. Note the development phase costs are per unit.
Project Stage
Cost
& RIBA work stage (see 4.5.1)
Start-up RIBA A-B £5-10,000 per project
Pre-development - RIBA C-E & F-H £30-50,000 per project
Development - RIBA G onwards £80-100,000 per unit
5.4.2 Finding the money at each of the three stages presents its own problems.
Start--up income – flexible funding can provide the catalyst a project needs to develop and
Start
harness opportunities as they emerge. Charitable grants are an obvious source, but funders are
cautious that this is a speculative stage of the project’s life. In Northumberland, the
Enablement Fund was an excellent source of start-up and pre-development funding.
The FoNDT Affordable Housing Project administered an Enablement Fund of £28,000 in

2006-2007, £26,000 in 2007 – 2008 and £10,000 in 2008 – 2009. The grant fund came from a
local district council, the county council and the regional development agency. Successful
community organsiations to the fund employed technical assistance and professional services
such as architects, valuers, tree and bat surveys and feasibility studies. Others used the grant
funding to creatively explore new approaches to enabling affordable housing in for example
working with land owners and other stakeholders to identify development opportunities and
capture housing issues on film.
The CLT Fund provides grants of up to £2,500 towards Technical Assistance. The CLT Fund is
administered by the Tudor Trust - see www.cltfund.org.uk
Local authorities can help with either grants or loans. If your project includes an asset
transfer, funds maybe available from the supporting programmes – see www.atu.org.uk for
more details If you are partnered with a Housing Association, they maybe willing to take
some of the fincail risk here or use their influence to obtain at-risk work from consultants
who will be looking to be involved further along the way.
Pre-
Pre-development income – this is a higher amount and carries more risk. Charitable grants
are even less likely. The CLT Fund includes an Investment Fund which provided un-secured
loans for this stage of a project. The loan is repayable if the project goes onto the
development stage and include the need to pay a heavy success fee, but it is one of the few
options available at this stage.

Development income – the bulk of your development funds is likely to come as a loan. The
size of the loan will normally be dependent on three inter-connected factors
1. Your ability to either immediately repay it from the income you get back from selling
on part of the properties in a shared ownership model, or the long-term repayment
supported by rental income from the houses. See Business plan section 5.5.
2. The lenders willingness to lend against the peculiarities of your scheme – mainly the
“restrictive” contents of your s106 agreement. (see section 3.5.5)
3. Your ability to offer the required security for the loan. (see section 5.4.4)
Most trusts are likely to get a better response to a loan request from a lender who understands
who they are as an organisation and what they are trying to achieve. On this subject see the
DTA publication ‘Better to Borrow?’ a free download from www.dta.org.uk.
Understanding lenders include the Triodos Bank (www.triodos.co.uk), Charity Bank

(www.charitybank.org) or Unity Bank (www.unity.co.uk). Some building societies are also
understanding of the community trust process – such as the Ecology (www.ecology.co.uk).
The chances are that any bank or building society loan you secure will not amount to all the
development funding you require, or can afford to take on. Often it will only amount to 60-
70% of the schemes overall funding requirement.
There are also possibilities with suppliers of patient capital – a term used to describe forms of
investment which are intended to achieve social benefits while also generating a financial
return. Most look at housing on its own as a no-goer but if your project is linked to wider
regeneration activity it should not be discounted. See Adventure Capital Fund for more details
www.adventurecapitalfund.org.uk
Futurebuilders (now part of the Social Investment Business) is a government-backed fund

offering support and investment to third sector organisations to deliver public services. It
offers a combination of loans, grants and professional support to build the capacity of third
sector organisations that are involved in, or want to become involved in, the delivery of
certain public services around children and young people, community cohesion, crime,
health, and education and learning. Whilst again housing seems to be excluded in is worth
keeping an eye on developments - www.socialinvestmentbusiness.org
Top--up capital loans are available as part of the CLT Fund.

Top The loan is provided by
Venturesome, part of Charities Aid Foundation (CAF). These loans can be added to any
commercial loans you have already secured. See the charities funding section on the CAF
website www.cafonline.org or go in via the CLT Fund website.
Loans, sometimes interest free can also be obtained from a local authority. There are examples
of enlighten authorities such as West Dorset Districts Councils support for the Buckland
Newton scheme (www.bucklandnewton.com)

Capital Grants – whilst the potential for securing charitable grants for the development stage
is limited, it is worth researching local charitable trusts. Some, in addition to specific criteria
to support housing may provide support for other elements of your project such as community
development, environment/energy efficient technology and training and employment.
Funders such as the Tudor Trust have shown support in the past and have contributed to the
Holy Island of Lindisfarne scheme. Grants from local authorities are more likely, particularly
if the housing scheme involves wider regeneration issues and brings empty properties back in
to life. The use of second home council tax is a good way in which local authority support
can be obtained.
Regeneration focussed projects should also be able to access grant funding from Regional
Development Agencies and the social investment funders listed above.
The Homes & Communities Agency (HCA) have a range of grant programme which are
currently under review. Accessing funds from the HCA is at a very early stage. As yet the
only successful scheme has been the Holy Island of Lindisfarne, but Buckland Newton is not
far behind.
Obtaining a grant from the HCA is currently complex but easier qualification and application
processes are being developed. The houses built using HCA grants will also be controlled in a
different way and there will be long-term regulatory implications to consider.
Grants from the HCA can support refurbishment of buildings, new build for shared
ownership and new build for rent. The intervention rates will vary for each type of scheme,
for example if you are renting your houses out for lower affordable rents then you are likely
to attract a higher grant level.
Another main implication is that to access HCA funds it is likely that the trust will need to
enter into a partnering arrangement with a Housing Association. In simple terms, this is
because the housing associations will be a known investment partner to the HCA, whilst the
trust is likely to have no track record with the HCA.
A full guide to accessing a grant from the HCA is included to support this guide – Resource A
The final source of main development funding is through shares and bonds. There is an
interesting and growing trend of issuing shares in community owned projects, such as
community owned pubs and shops. Community co-operative renewable energy projects also
exist where the cost of buying a share starts at £250. Preference for joining the scheme is
given to people living in areas where windfarms are developed to maximise the economic
benefits to the local community. Such co-operatives are constituted in the Industrial and
Provident Societies model.
Examples also exist of land purchase using a similar setup. At Fordhall Farm in Shropshire,
£500,000 was raised to go towards the £800,000 purchase of a 140-acre farm. The shares
started at £50. Each share holder is a member of The Fordhall Community Land Initiative IPS
and is entailed to a vote at the AGM. The shares are returnable but are not transferable or

tradable. Unlike the renewable energy model, the shares will not produce a profit – they are
simply an investment in something the investor believes in and wants to be a part of.
Community Bonds enable finance to be raised by accessing external funds from various
sources - such as wealthy individuals or organisations - rather than the High Street banks. A
bond is simply a loan (in the form of a security) although the terminology used is rather
different. The ‘issuer’ of the bond is equivalent to the ‘borrower’. Bonds are generally issued
for a fixed term of around 10 years – this is known as the ‘maturity’.
For the latest on community shares and bonds go to www.communityshares.org.uk and for a
free download of Community Shares and Bond Issues – the Sharpest Tool in the Box go to the
DTA website – www.dta.org.uk/resources
5.4.3 For most trusts taking out a loan is a major decision. Making this decision will mean
balancing the risks involved. The decision of course is an organisational one and not an
individual one and so can lead to more complex discussions. All lenders you make contact
with will provide direct support to help you make this decision or in addition provide a
printed guide to help you. On the Triodos bank web site, www.triodos.co.uk you can
download a guide produced by the Triodos Bank and Sayer Vincent Consultants entitled
“Balancing Risks” which has good general guidance.
5.4.4 Taking out a bank loan will require the trust putting up something as a security. If a
trust has existing property they could use them as security. Something to consider here is how
the properties you may already own will be valued as a security. It is possible the limitations
put on them by either their restrictive use, the grants you used to buy them, or clauses with
ownership documents can keep the values low and make their use as a security less effective
than you thought. It is worth checking this issue out at an early stage. At Resource K you will
find one personal view from Tony Ives FRICS on the subject.
5.5
5.5 The Business Plan
Whilst the most important element of any project is its financial viability which can be stated
in a few pages, you may be required to write a more comprehensive Business Plan. A good
business plan should include much more about your project. In general terms the Business
Planning section in To Have and to Hold publication is recommended.
business
5.5.1 There are as many busine ss plans templates as businesses. It is a personal thing, but
the advice here is that your Business Plan should follow three basic rules:-
a) It should a document written for someone who knows nothing about the trust or your
scheme, i.e it should include the story about your organisation and then about what
you want to do, why and how.
b) Logical, in a step by step process, it should take the reader along the journey you are
looking to take
c) It should be clear & snappy but with appendices or further documents which tell the
full story

The following template is one which covers the key areas it is felt should be included:-
BUSINESS PLAN TEMPLATE
SUMMARY – 2-3 pages written at the end
INTRODUCTION – why you are writing it, what you have done it getting it written, its scope, and
methodology - 1-2 pages
YOUR ORGANISATIONS PLAN – 2-3 page extracts from a bigger plan, so the reader knows how they are
dealing with.
MARKET BACKGROUND – your local housing need, how it has been identified, how this relates to your
scheme (tenure options) etc. Also a bit in here about who else is operating in the market in your area
and why your trust has a part to play providing added value.
THE SITE – everything the reader needs to know. Size, shape constraints, access, infrastructure,
ownership, planning.
THE SCHEME – DESIGN

What you want to do with the site, layout, environmental objectives, standards etc. Infrastructure/pre-
development issues.
THE SCHEME – DELIVERY

Partners – development team, procurement route, who is leading on what.
Stakeholders support – where it fits into bigger picture.
What are your resources to achieve delivery.
MARKETING PLAN - What are you going to do with houses to get tenants, sell on as part share or
whatever ?
FINANCIAL PROJECTIONS - Capital costs, development finance, income and expenditure projections, cash
flow. This is the section your funders (grants & loans) will be most interested in. Big assumptions rather
than clear detail will leap out as poor.
SENSITIVITY ANALYSIS – show you have consider costs going up or income coming down and how it will
effect your plans – and what you will do to respond to them (see section x.x)
FUNDING PLAN – how you get the money for the financial projections
OPERATIONAL & MANAGEMENT

If they are rented properties this will be a fuller section.
If they are shared ownership then what are you going to do to manage your share and keep in touch
with your responsibilities. What is your organisations “exit strategy ” from the project?
ACTION PLAN – times with who is doing what by when etc
RISK ANALYSIS – always good to show you have thought about what could go wrong and how you
would react/mitigate etc
APPENDICES

5.5.2 Showing someone that your project stacks up financially is part of the Financial
Projections section of the Business Plan. There may various options to consider along the way
to a final version. Using our imaginary 7 house scheme in section 5.3 above the following
four scenarios can be shown. Remember the costs and income are illustrative only. The loan
repayment calculations have been made using the free calculator on the BBC website:
http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml
Scenario 1 – The project costs following the lines in section 5.3 above. The fees have been
driven down. A £650,000 development loan at 4.5% was required during a nine month
construction. All properties were then sold on as shared ownership as either 50% or 60% of
Open Market Value (OMV). The trust decided not to seek grant subsidy for its shared-
ownership houses – although this is possible via the HCA (see above).
House Details Size m2 Cost m2 Total Cost OMV 50% OMV 60% OMV
2-bed house - 2/3 person 65 1,050 68,250 145,000 72,500
2-bed house - 2/3 person 65 1,050 68,250 145,000 87,000
2-bed house - 4 person 75 950 71,250 160,000 96,000
2-bed house - 4 person 75 950 71,250 160,000 96,000
3-bed house - 4 person 90 900 81,000 210,000 105,000
3-bed house - 4 person 90 900 81,000 210,000 126,000
3-bed house - 4 person 90 900 81,000 210,000 126,000
Builders Contract Sum £548,100 £177,500 £531,000
Fees & Other Costs % Total Cost

Architect 5% 32,201
Quantity Surveyor 2.5% 16,100
CDM 0.5% 3,220
Structural Engineer 1% 6,440
M&E 1% 6,440
Land purchase 44,750
Land clearing charge 3,750
Planning 2,755
Build Regs 2,000
Bank charges on £650,000 development loan 6,500
Bank Interest only 4.5% over 9 mths 21,933
Legal 2,937
Marketing 3,500
Project Management 7,500
Other Costs Sub Total 160,026
Builders
Builders Contract Sum b/fw
b/fwd 548,100
TOTAL PROJECT COST £708,126
INCOME
Start up grant 7,500
50% proceeds of 2 homes 177,500
£716,000
Project end Surplus £7,873

construction. Four of the properties were then sold on as shared ownership as either 50% or
60% of Open Market Value (OMV) and the remaining 3 rented out. There is now the need for
a development grant and a land purchase grant (local authority). If the development grant is
to be from the HCA, some additional costs have been shown and there is a slight reduction in
marketing costs.
House Details Size m2 Cost m2 Total Cost OMV 50% OMV 60% OMV
2-bed house - 2/3 person 65 1,050 68,250 145,000 72,500
2-bed house - 2/3 person 65 1050 68,250 145,000 87,000
2-bed house - 4 person 75 950 71,250 160,000 96,000
2-bed house - 4 person 75 950 71,250 160,000 96,000
3-bed house - 4 person 90 900 81,000 210,000
3-bed house - 4 person 90 900 81,000 210,000
3-bed house - 4 person 90 900 81,000 210,000
Builders Contract Sum £548,100 £72
£72,500 £279,000

Architect 5% 32,201
CDM 0.5% 3,220
M&E 1% 6,440
Planning 2,755
Build Regs 2,000
Legal 2,937
Marketing 3,000
HCA additional grant costs 20,000
b/fwd 548,100

27,626
INCOME
50% proceeds of 1 home 72,500
Bank Loan
Bank Loan – 25yrs 135,000
3 rents - £75pwk @ 52 wks = £11,700
Grant – HCA £62,500 each 187,500
less 20% costs = £9,360
for 3 rent units
£135,000 bank loan @ 4.5% = £9,096 per annum
Land Purchase Grant 50,000
Total £731,500
Project end surplus £3,874

£3,874

construction. None of the properties are sold. There is now the need for a major development
grant, a land purchase grant, and a local authority donation. As the development grant is to be
from the HCA, additional costs have been shown (proportional to the number or rental units)
and since there are no house sales, the marketing costs have been removed.
It is worth contemplating the longitudinal perspective of this scenario in connection with the
unrestricted income which can be generated for a trust once loans are repaid.
House
House Details Size m2 Cost m2 Total Cost
2-bed house - 2/3 person 65 1,050 68,250
2-bed house - 2/3 person 65 1050 68,250
2-bed house - 4 person 75 950 71,250
2-bed house - 4 person 75 950 71,250
3-bed house - 4 person 90 900 81,000
3-bed house - 4 person 90 900 81,000
3-bed house - 4 person 90 900 81,000
Builders Contract Sum £548,100

Architect 5% 32,201
CDM 0.5% 3,220
M&E 1% 6,440
Planning 2,755
Build Regs 2,000
Legal 2,937
HCA additional grant costs 35,000
b/fwd 548,100

42,626
,626
INCOME
Bank Loan – 25yrs 180,000
Grant – HCA £70,000 each 490,000
Bank Loan
for 7 rent units
7 rents – 2 @ 62pwk + 2 @ £68pwk + 3 @ £75pwk
Land Purchase Grant 50,000
over 52 wks = £15,236
LA contribution 20,000
less 20% costs = £12,189
Total £747,500
£180,000 bank loan @ 4.5% = £12,132 per annum
Project end surplus £4,873

5.5.3
5.5.3 Housing development is inherently risky and great care must be taken with any
figures used in your feasibility calculations. Small errors or inaccurate estimates of any of the
key variables can have a disproportionate effect on the bottom line.
Some form of sensitivity analysis should always be undertaken. The basis of a sensitivity
analysis is simple. You should re-run you financial model s (having saved the original!), but
this time increasing or decreasing costs by small amounts - say 5%, 10%, 15%, 20%. Equally
you should then look at your income streams from rents and part sales and undertake the
same analysis.
At the end of the process you should be able to gauge the financial robustness of your scheme
and have a better understanding of the areas where tight financial control is required.
5.6
5.6 Budget Control
In support of your project you will need to prepare a cash flow forecast. This should be
relatively simple because the number of invoices to be paid and sources of income are low.
Obviously the best cash flow will show you using up grant money first and then only drawing
down the loan you need when you need it – remembering that you will start paying interest
on the loan when you start using it.
Your external consultants will have dates for their staged payments which are known at the
start of the construction phase.
Builders invoices will be presented on a monthly basis at the site meetings and normally need
paying in 14-12 days. If you fail to pay the builder on time it would be a breach of the
contract you have signed with them.
The invoices will be accompanied by an Interim Certificate issued by the architect and
supported by work undertaken by the quantity surveyor. The interim certificate confirms the
work completed by the builder in the last month. A retention is taken off the certificate
amount (usually 5%). This retention is held by the trust. Half of this retention is paid to the
builder on practical completion (handover) and the other half held until the end of the 12
month defect liabilities period (see section 4.9.4)
On the presentation of the monthly invoice from the builder the QS will also present an
update on the contract sum showing the changes agreed. Each change should be shown
against the appropriate Architects Instruction (see section 4.9.2).
In the example below, the same contract sum as before has been used. The table then tracks
the changes to this figure. In this scheme, which is still not completed, there were savings on
all the electric, water and telecom provisional sums included in the contract sum. In addition
one of the sub-contractors work was less than budgeted. Six Architects Instructions (AIs) have
been issued reflecting various changes and the cost implications are shown.

AI
Contract Work Omit Add Contract Work Notes
No
Contract Sum £548,100
Construction
Contingency £26,100 £0 Take away contingency from Contract sum
Prov Sums
Electric £8,000 £4,614 Provisional Sums estimated at time contract sum agreed
£2,000 £1,200
£6,000 £5,255
Piling Subcontract £10,000 £8,885 Re-measured after completed and came in under budget
1.0 Design drawing issue;
House perimeter vent £0 £4,000 Need for extra vents around perimeter of houses
Stainless steel cill detail £840 £3,080 Extra requirement agreed on top of budget
1.1 Stone wall to rear £0 £2,300 Agreed extra works to neighbouring land
2.0 Oil Tanks £0 £1,200 Larger tanks required

Expansion joints render £1,300 £0 No longer required
2.1 Redwood Flooring £3,000 £1,300 Lower quality floor covering agreed
3.0 Loft Ladder £240 £600 Extra requirement to increased specification
3.1 Electric cabling £0 £160 To loft lights and power sockets
£57,480 £580,694
-£57,480
Anticipated Final Account £523,214
Contingency remaining to £548,100 £24,886

6 PEOPLE
6.1 Introduction
In this section we have grouped together a range of “people” related subjects. Dealing with
people is a requirement which runs the full length of any housing project. Your community
will have a part to play at all stages: as consultees in the early conversations, as supporters (and
possibly objectors) to planning proposals, as occupiers of your houses and of course, as trustees
who may have a housing management role in the future.
6.2 Community Support

Housing can be an emotive subject for communities. If your scheme is misunderstood by the
community it could be the subject of opposition which could have implications for gaining
planning permission and even financial support for the scheme.
In addition to satisfying the housing requirements of the community, your scheme is likely to
provide many other less tangible benefits such as increased community self confidence and the
capacity to act. There may also be long-term financial benefits such as rental housing income
which the trust can allocate to other community service development and projects. All of these
benefits should be put to the community during the discussions about scheme development.
Effective use of these arguments can act to counter – or prevent - scheme opposition
6.2.1 At an early stage of your scheme you should identify the stakeholders you need to
keep informed of your plans. This list may include, the community in general, neighbouring
land owners, local authorities, local politicians, organisations and potential partners.
Effort should be put into communicating your message in your words before rumours spread
and distort the facts. Public meetings should be considered when you have something to say.
Consider the use of other information hubs - certain pubs, school notice boards, post office.
It is important to think about providing a voice to those in the community that find traditional
methods of consultation and meeting difficult to attend or alienating. This may include young
or old, people in low paid work that may not be able to freely attend meetings regardless of the
period of notice, people who currently live outside of the immediate community that your
Trust is hoping to attract or bring back.
Local newspapers can be useful but they will cut down press releases you give them and have a
habit of concentrating on the negative. Direct mailings or using your own neighbourhood
newsletters is the best source – and what about blogs and twittering! Be prepared to constantly
put effort into communication especially on important one-to-one briefings with more
influential individuals, such as politicians and council leaders.
Trusts should also consider preparing their own in-house information guides for their
community. Buckland Newton Community Property Trust recently published a residents
guide and answers to Frequently Asked Questions. It is individual to their scheme but has a
good set of general points which will be of interest to many trusts. It can be downloaded from
www.bucklandnewton.com.
COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – PEOPLE PAGE X48

As part of the FoNDT project the Seahouses Trust, in partnership with their two local Parish
Councils, undertook a comprehensive housing needs and aspirations survey. The project involved
the local authority commissioning the Seahouses Trust to carry out a housing needs study in
Seahouses and Beadnell.
In addition to delivering a comprehensively researched and professionally analysed survey; the

benefit of this approach was the local knowledge that a proactive community organisation was able
to draw upon. By creating a living room with sofas, standing lamps and coffee tables, on the village
green, the consultation event made people think and got people talking. This creative approach
helped locals, visitors and passers-by really engage with the process and make constructive
contributions about aspirations, housing needs and their ideas.
The survey also produced a film which gave a very real and personal account of the plight
individuals and families face. The film explored the link between housing and people’s ability to
remain in communities in addition to the impact that the loss of these people would have on the
local social fabric. As a counterpoint to these issues, potential community led solutions were
examined to identify a positive future direction for the area.
Across the exercise some very disturbing stories emerged for those keen to maintain the
sustainability of this attractive string of seaside villages. Young people in particular spoke about the
frustration of being in work, earning a reasonable income but of reaching an age where they were
desperate to leave home and start an independent life, and of young and growing families living in
very unsuitable accommodation. What this exercise did was to showcase correlation between poor
housing choice and retention of local employees and also helped the community to begin to
collectively find solutions to local housing need.
The impact of this work is that the community was mobilised to identify housing need as an issue for
the community and not just for individuals. They now have evidence to support appropriate
development and have identified suitable sites within the area.
6.2.2 As outlined in section 2.5, Housing Need Surveys play a crucial role in providing the
evidence to convince the wider community and the planning authority that a scheme is
meeting local needs.
In addition, the trust needs to look behind the basic housing data and identify the people
within their community who will either rent or buy a part-share in the houses they propose to
build. It is these people who will provide the income for your project to meet the expenditure.
In support of the need for evidence to support the business case, some communities have
undertaken a second level housing questionnaire seeking details of individual’s financial
situation.
Getting this level of personal information can be problematic, but you may consider it
important if you are to be satisfied in your own minds that you have a robust business case.
Trusts also need to be fully aware of personal damage this can inflivt on people if by
undertaking this work they raise the expectations of individuals where the opportunity of
finding a home is small.
Any expectations raised in a community as a result of a survey must be managed by the trust
through clear, concise and regular communication.

6.2.3 In communicating with local authorities at all levels, trusts should be mindful of
developments within the Homes and Communities Agency’s (HCA ) business process known
as the Single Conversation1. The process involves the HCA engaging in consultation with local
'stakeholders' such as local authorities, in a ‘single conversation’ on all aspects of housing and
regeneration. HCA see this as the way in which they will agree and secure delivery at the
local level and support their national objectives. The term is comprehensive, covering the full
range of housing, infrastructure, regeneration and community activities required in a local
authority area. It will draw on the priorities for a local area as set out in key local plans.
This approach may well benefit organisations like development trusts who are often involved
in multiple aspects of community life in facilitating access to services and running community
enterprises. The HCA's joined up approach to housing and regeneration should help trusts take
forward joint initiatives and proposals.
6.3 Tenure Options

A decision on what the trust intends to do with the houses will have been made well before
they are ready for use. There are two main tenure options, rent them out or sell a share in
them. The time to start thinking about the practicalities of how you as a Trust will do this is
not after you have built them, but beforehand, it should be part of the initial planning process.
6.3.1 Whatever the tenure option chosen a set of various polices and agreements will be
required to select tenants and home buyers and deal with the legal side of their involvement.
If the housing scheme includes a s106 agreement, there could be some condition within it as to
who is eligible to buy or rent one of your houses. Generally these people are known as
qualified people. The rules on how people can become qualified will vary from place to place.
Local authority housing departments will maintain a register of people in housing need. This
will support the way they select people for their houses. It is worth noting that in many areas
of acute housing pressure, people may be deterred from putting their name on this register
because of their perception “that they have no chance” of ever getting a place to live.
Housing Associations often use the same local authority register but they can also select people
using local polices so long as they follow the general rules that priority, or reasonable
preference, is given to categories of people who have a more urgent housing need than others.
Some trusts have taken proactive action to make sure a wider range of local people in need are
registered with the local authority, especially young people and people on very low incomes.
They have done this through local campaigns, raising awareness of eligibility criteria to
register and knocking on doors. A small number of trusts have decided to compile their own
register that they intend to use alongside local authority lists, advice should always be sought
on the legality and practicalities of storing information and acceptance by the local authority.
A trust can set their own allocation polices so long as they are fair and non-discriminatory. If
the trust has taken public subsidy from the HCA or local authority, then their policy will need
to be agreed by these agencies to ensure it complies with their standards. Below are the
policies from the Holy Island of Lindisfarne and Buckland Newton trusts.
1
www.homesandcommunities.co.uk

HOLY ISLAND OF LINDISFARNE COMMUNITY DEVELOPMENT TRUST
1. Applicant(s) with dependent children, living and working on the island.
2. Single people/couples one of whom lives and works on the island.
3. Applicant(s) with dependent children, working on the island but having to

live elsewhere, who wish to live on the island.
4. Single people/couples of which one works on the island but are

living elsewhere and who wish to return.
5. Applicant(s) with children who have strong island connections,

who live elsewhere, who wish to return.
6. Applicant(s) with children who have strong island connections and presently
live on the island in insecure accommodation, who wish to be considered
for Development Trust housing.
7. Single people/couples (with at least one) who have strong island connections,
who live elsewhere, who wish to return.
8. Single people/couples (with at least one) who have strong island connections
and present live on the island in insecure accommodation, who wish to be
considered for Development Trust housing.
9. Any person(s) from neighbouring parishes who wish to live on Holy Island.
10. Any person(s) from the rest of the Borough of Berwick Upon Tweed
who wish to live on Holy Island.
11. Any persons from the rest of the United Kingdom who wish to live on Holy Island.
BUCKLAND NEWTON COMMUNITY PROPERTY TRUST
• The priority are the Residents or former residents of the Parish of Buckland Newton
• After meeting this need our homes may be offered to individuals and families
of the surrounding villages and, if necessary, from the whole of Dorset.
• Households with family in the parish. In addition to parents, adult children or siblings,
this may include associations with other family members such as step-parents,
grandparents, grandchildren, aunts and uncles, provided there are sufficiently close and
demonstrable links in the form of frequent contact, commitment or dependency.
• Households working in the parish.
• Educated at the village school at some previous time
• All eligible persons must be listed on the West Dorset District Council Housing Register

The full policy should also include details on the whole selection and allocation process – you
should seek to answer questions such as:-
• How you will advertise the properties?

• How do people apply – on forms – how do they get them?
• What happens after people apply – time scales for response etc?
• How and who will assess the applications?
• Will you interview applicants?
• Will you take references?
• Will you seek proof of identity?
• How will you proceed with a rejection and a successful application?
• What are the full timescales?
One issue to consider is the potential fall out within small communities. If you only have 8
houses but 20 applicants, many people are going to be disappointed. Your selection policy
should be clear and defendable. Consideration should be given to putting a good level of
external independence into the selection. This could be done by simply employing someone to
do the work or setting up a selection panel drawn from recognised and trusted local bodies,
alongside people with professional skills in administering allocations procedures such as a
housing provider housing manager.
6.3.2 The trust should consider maintaining a list of local people who would like to own or
rent property they have built. From time to time the trust may need to advertise for new
people to put their names on the list.
6.4 Management of Rented Properties

Many community trusts up and down the country manage the whole process of tenant and
property management. The other option is to employ someone to do the job for you. This
could involve one organisation to do all the work, or different organisations to manage the
properties and tenants.
6.4.1 The occupier of your rented houses will be issued a tenancy agreement. The type of
tenancies usually granted by Housing Associations or Housing Trusts is the assured tenancy.
They offer some security to the occupier in that as long as they do not break the terms of the
Tenancy Agreement they can continue to live in the property2. Private landlords usually issue
an assured shorthold tenancy, which allows them to regain possession of the property 6
months after the beginning of the tenancy, provided that they give two months’ notice
requiring possession.
A tenancy agreement is a legal agreement in writing that sets out the rights and responsibilities
of both the landlord (the trust) and the tenant. It will contain details such as the length of the
agreement, the rent payable, and what is and isn't allowed in the property, such as pets.
2
Assured tenancies can also have fixed term periods, in which case occupation comes to an end at the end of the fixed term.

Setting up a tenancy agreement is not difficult and your legal advisers will be able to help. If
you choose to employ an agent to undertake the work for you they are likely to have their
own version.
6.4.2 Many trusts will manage their small number of residential properties with just these
three policies: Lettings (Nominations) policy, Application process (including forms) and
Tenancy agreement.
Compare this with the minimum specifications for housing management service standards
given to Housing Associations which require a range of policies, procedure manuals and
method statements on subjects such as lettings and sales, repairs and maintenance, equality and
diversity, dealing with anti-social behaviour, tenancy management and residents’ rights and
obligations.
A trust undertaking the full management of their properties will obviously aspire to be a good
and responsible landlord – after all they are ultimately answerable to the community. Going
beyond the basic three documents and adopting some of the long list of standards required by a
Housing Association should be considered. In support of their landlord responsibilities, some
trusts may also be members of trade bodies who provide training and support such as the
National Housing Federation.
6.4.3 The situation surrounding the regulation of organisations who manage rented
accommodation at affordable or social rents, is in a period of change.
The Tenant Services Authority (TSA), is the new regulator for affordable housing set up in
December 2008, having taken over the regulatory powers of the Housing Corporation. In
spring 2010, the TSA will become responsible for all affordable housing, whether it’s provided
by local authorities, arm’s-length management organisations or housing associations. Private
landlords will be able to register as providers of social housing too. Where this leaves
community trusts is uncertain. They will be able to register with the TSA if they choose but
the registration criteria is still to be established.
One fact appears clear, if a trust uses HCA funds to provide rented homes the trust will be
required to register with the TSA if it wants to manage the houses themselves.
6.4.4 In themajority of cases, if the trust has a central and/or accessible location to operate
out of, and already manages other property, it is not that time intensive to add on a small
number of residential properties, (subject to the policy and protocol aspects mentioned above).
There may however be circumstances where the trust does not want to take on the housing
management role itself. In these situations it can enter into an agreement with a managing
agent. This could be a specific property management organisation or a Housing Association.
There will of course be a charge for this service, around 10-15% of the rental income.
To work with an agent you will need to give them powers to act on your behalf including the
authority to negotiate the terms of the tenancy, prepare the paperwork, sign a contract and
agree a lease. These powers will generally be set out in a contractual agreement of some kind.

6.4.5 If your houses are to be supported by an HCA grant then there will be a requirement
that the management of the housing is undertaken by an accredited housing manager. Since
the trust is unlikely to wish to become accredited, this will mean employing a Housing
Association to undertake the work on your behalf. At present, provision exists for the Housing
Association to sub-contract back to the trust some of the day-to-day responsibilities.
This area of the HCA grant process is still very new and more experience is required before
firmer guidance can be provided.
6.4.6 If the Trust is retaining ownership of the housing and renting properties out, you will
need to ensure they are maintained to good standards. This will involve undertaking the
running repairs, servicing of equipment, setting down cyclical works, replacing things that
wear out and planning for the long term maintenance of the buildings.
A trust should set down guidance on all of these subjects to effect good management of their
properties. The repair plan should show the main expenditure items based against the sinking
fund they will be accumulating. The major items are things such as;
Re-painting the outside 5 years

Replace boilers 10 years
Kitchens 20 years
Windows and doors 25 years
Bathrooms 20 years
Central heating systems 30 years
Rewiring property 25 years
Fabric of the building 65 years
All of the above are worst case scenarios and you wouldn't replace if you didn't need to.
However, some boilers don't last 10 years and you may have to make a decision to replace
earlier, that's the whole point of allowing a surplus to build up in addition to the sinking fund.
6.4.7 The financial aspects for managing the properties need to be set down in a clear budget
process. Costs will vary, and not all will apply, but the table below gives some basic guidance
re the costs which will come out of the rental income you receive.
Expenditure Item % of annual rental income

General Repair Fund 2.5%
Major Cyclical Repair Fund (Sinking Fund) 10%
Voids & Bad debts 3.5%
Management Fee 5%
In addition there will be buildings insurance. If there is a heavy turnover of tenants – unlikely
for trust properties - some advertising costs should be included.

6.5 Shared Ownership

The other use of the houses built by the trust will be to sell a share of them to a qualified
person. The development of the ways in which community trusts can legally share the
properties they own so as to protect them as affordable in perpetuity can be seen by
newcomers to the subject as very complex. It not therefore the intention of this report to go
into the detail of shared ownership and shared equity models – see Owning a Piece of Home
www.dta.org.uk
The disposal models are being championed by the National CLT programme and an update on
their current thinking can be found at Resource L.
6.5.1 Some of the practical issues/lessons which have arisen as these disposal models are
becoming used in connection with trust houses are:-
• Your schemes inclusion of shared ownership units should reflect actual need i.e. be
supported by a recent and valid housing needs survey.
• The mortgageability of the properties is key. It is no good you wanting to sell a

share if the prospective owners cannot get a mortgage.
• Helping prospective owners negotiate lower deposits with their lenders can be a
help. Imaginative ways around this barrier need to be developed. Evidence from
some CLTs that fostering a relationship with local/regional based mutual societies
has been advantageous in agreeing terms and negotiating appropriate security and
products for both the financial institution and potential purchasers.
• Ensure affordability – the new shared owners should only be paying around 33%
of their gross household income on the mortgage
• If you are going to take a reservation fee for a property make it small (£100)
• Consider bringing in Estate Agents to help you find new part-owners.
• Be firmer on timescales for potential purchaser. Remember until the new part
owners pays up you will be still paying the mortgage.
• There is the option of “unsold” units becoming affordable housing for social or
intermediate rent if no restrictive conditions on land apply and additional funding
can be found to pay off the development loan.
6.5.2 Even if the property is dealt with under a shared ownership disposal model the trust
will still have some management responsibilities to consider. Unfortunately, because the
numbers of community shared housing schemes nationally is relatively low, there is not a
great deal of experience to draw upon, but what experience there is indicates that a
community trust can provide the management and maintenance services required.
The range of services required by shared homeowners is different from those required by
rental tenants. The Trust may have legal duties connected with ground rents, leases, re-sales
and mortgage ownership. The Trust will also need to be prepared to handle disputes and have
legal and property advice available to deal with issues as they arise.

Many of the subjects listed will require the trust to pay for a service. It is therefore important
to think ahead and identify sources of future income to support this expenditure.
6.5.3 In most schemes the majority of repair and maintenance responsibilities will be given
to the occupier of the home and not the trust. There could however, be “common parts” for
which the trust has a responsibility. This would include schemes where there are either flats or
there are shared estate areas, e.g. public open space.
There is also a growing feeling that in certain circumstances (particularly where you have a
mixture of flats and houses) it might actually be better for the trust to maintain the properties
and recharge the cost to the individual owners. The reasons for this are to preserve a uniform
standard of repair across the site and also possibly to pass on savings which might be achieved
by the site being maintained as a whole. If the trust does retain maintenance responsibilities, it
will need to include within any lease the ability to collect a service charge.
On a longer term basis, although this is generally a rented property issue and not one for
shared ownership, the trust could consider establishing a sinking fund for major replacements,
such as heating systems, windows, kitchens. Alternatively, the property could be refinanced
with a new loan and the first loan paid off.
6.5.4 Service charges are payments by the leaseholder to the landlord (the trust) for all the
services the landlord provides. These could include maintenance and repairs, insurance of the
building and, in some cases, provision of central heating, lifts, lighting and cleaning of
common areas etc. A service charge could also include the costs of management, either by the
trust or by a managing agent.
Details of what can (and cannot) be charged by the trust and the proportion of the charge to be
paid by the individual leaseholder will all be set out in the lease. The trust will need to provide
the services being charged for and establish a system to collect the service charge. Advice
should be sought in setting the level of the service charge.
6.5.5 In shared housing schemes operated by community trusts it is not usual to charge a
rent on the part of the building not owned by the occupier. The trust may however, look to
collect a low level ground rent from all homes. This could be as low as £2-£3 per week and
used by the trust to cover basic administration costs. Details of any ground rent would be
included in the legal documents.
6.5.6 If the property is a flat, the lease documents will normally require the landlord (the
trust) to take out adequate insurance for the building and the common parts. It will also give
the trust the right to recover the cost of the premium through the service charges. This
insurance policy will not normally cover the contents of individuals living in the flats.
In other circumstances where the occupier is required to take out an insurance policy, the
trust – who still retains a share of the property - will need to set down a way of checking the
insurance cover is current and adequate.

6.5.7 Since 14 December 2007, every home put on the market, no matter what size, must
have a Home Information Pack (HIP). A HIP includes documents that are required when
homes are bought and sold. Some documents are mandatory and others optional.
The mandatory documents are:
• An index (i.e. a list of the contents of the HIP)

• A sale statement (summarising the terms of sale)
• Evidence of title
• Standard searches (i.e. local authority enquiries, drainage and water)
• An Energy Performance Certificate
• Commonhold information (where appropriate)
• A copy of the lease (where appropriate)
Documents that are optional include:
• A Home Condition Report

• Additional leasehold, information
• Guarantees and warranties
• Other searches relevant to the particular area
In future re-sales, whilst the collection of evidence will be undertaken by the seller, the trust
may need to oversee the process.

COMMUNITY HOUSING - A Practical Development Guide PDF

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

COMMUNITY HOUSING - A Practical Development Guide PDF

Uploaded by

Copyright:

Available Formats

So you want to build a house...

Written by David Brettell

Call for Action - FoNDT Housing Group

SUPPORTING RESOURCES (DOWNLOADABLE FROM WWW,DTA.ORG.UK)

A Guide to accessing HCA grants (National Affordable Housing Programme)

The Housing Challenge

 Establish an inclusive and proactive Northumberland Housing Forum

 In 2008-09 income from the suspension of Second Homes Council Tax

 One of the over-riding learning outcomes of the FoNDT Affordable Housing

 FoNDT would like to explore and formalise continuing local authority

 Develop a protocol (perhaps through the Northumberland Housing Forum) to

 The FoNDT Affordable Housing Group firmly believes that development

FoNDT Housing Group

Who is the guide for…. Where this guide fits in…….. ?

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – INTRODUCTION PAGE 1

To Have and to Hold Housing: a community asset? Owning a Piece of Home

Then we will do it ourselves

So you want to build a house ……

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – INTRODUCTION PAGE 2

How to use the Guide

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – INTRODUCTION PAGE 3

2.2 Legal Issues

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 4

A Community Land Trust is a corporate body which:-

• to provide a benefit to the local community

2. is established under arrangements which are expressly designed to ensure that:

• the members of a trust control it.

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 5

2.2.5 A number of issues concern the subject of assets.

2.3 The Right Team

• Finance • Working with people

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 6

2.4 Resources & Governance

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 7

• the charity stops being a charity

2.5 Do you know the needs of your community?

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 8

2.6 Being a Good Client

¾ Respond and contribute to the context – as a community led organisation this is a

¾ Commit to sustainability – communities are often at the forefront of sustainable

1 A free download from - http://www.cabe.org.uk/files/creating-excellent-buildings.pdf

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – FIRM FOUNDATIONS PAGE 9

We will also look at renovating and refurbishing existing buildings.

3.2 Finding a Building Site

• Description of site, size etc with map & photos

• You as a not-for-private-profit community organisation are looking to secure the

• You intend to build quality housing with high environmental standards.

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – LAND PAGE 10

Land and property can come to a trust in various ways;

Allendale Community Housing Ltd (in conjunction with a registered housing

Prudhoe Community Partnership are also actively progressing an asset transfer

• regional and local regeneration programmes - Haltwhistle Community

• local networks and connections - often best source of development opportunities.

• as part of a wider commercial scheme - e.g where a factory, business park or

• sold at a discount by private companies as part of larger schemes, or under their

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – LAND PAGE 11

Additional tips from trusts on how to find sites are: -

• Advertise in Parish magazine - backed by Parish Council support.

3.3 Site Appraisals

3.4 Securing the Site for your Scheme

COMMUNITY HOUSING: A PRACTICAL DEVELOPMENT GUIDE – LAND PAGE 12

importance growing. It is particularly important in connection with potential asset

1. Securing an Option Agreement

Establish an inclusive and proactive Northumberland Housing Forum

In 2008-09 income from the suspension of Second Homes Council Tax

One of the over-riding learning outcomes of the FoNDT Affordable Housing

FoNDT would like to explore and formalise continuing local authority

Develop a protocol (perhaps through the Northumberland Housing Forum) to

The FoNDT Affordable Housing Group firmly believes that development