Stop wasting your- rent - set up housing Co-operative

mohawk

One way of not wasting all your money if you are forced to be a tenant paying rent because you are unable to actually buy your own house is to become a member of a housing co-operative.

A housing co-op is not necessarily a shared house. Some are, but many already existing housing co-ops rent out individual houses or flats to their members.

The housing co-op is the 'landlord' & every member of the housing co-op owns an equal share & has equal voting rights.

Instead of being at the mercy of a private landlord, each member of the co-op has collective control over how the co-op works and what it does.

This means that instead of the private landlord getting rich as his tenants pay his mortgage to buy his house and make him richer, the co-op, equally owned by every member, becomes richer instead.

That means each person paying rent as a member of the co-op also gets richer too, either eventually paying lower rents or having rent already paid returned as a lump sum when they leave the co-op, which they can then use as a deposit to buy their own house.

So, being a member of a housing co-op can be a sneaky way of not really paying rent at all if the co-op is organised in this way. Or rather you pay the rent as normal, but actually eventually get it back instead of making a private landlord richer.

For some strange reason there are not a huge number of housing co-ops in the UK yet but there are some to have a look at on the internet to get an understanding of how they work.

Some co-ops have started without having any money of their own at all & succeeded in buying a house because there are all sorts of ways of finding the money to fund housing co-ops within the co-op movement.

The legal rules of setting up and running co-ops give them privileges and advantages ordinary companies don’t have. It is also a principle of the co-op movement that co-ops help each other which also means loans are available from the co-op movement.

Financial rules also allow co-ops to borrow money from the public by means of selling redeemable shares bearing whatever interest rate the coop decides is suitable.

This means a housing co-op could borrow 100% of the purchase price of a house via crowdfunding, offering people buying redeemable shares 3-4% at present and then charge rents equalling about 5-6% ( the same amount as private landlords generally do) but then over time the rents would become cheaper as ordinary private landlord rents generally increase all the time. But the housing co-op rent could remain completely stable if that is what the co-op members wanted, for instance.

A crowdfunding website was recently set up called Landbay which asks members of the public to make loans to fund mortgages for private landlords. The public are being offered interest of 3.5% and the lanlords are being offered mortgages with interest rates at around 5%.

So first of all this helps show the basic idea really does actually work - borrow money off the public at a low interest rate but the public are happy because their savings earn more than bank saving accounts offer, and as long as the housing co-op is charging a rent sufficient to pay this, the members of the housing co-op are winning hands down.

Just to press this point home. There is already a crowdfunding website offering just 3.5% interest to the public wanting to lend it to private landlords which the website will charge the landlords about 5% for. Those landlords will now make quite sure they will be charging more than that to to tenants.

So, you can see that the idea of the housing co-op is to cut out the private landlord and to become your own landlord under the umbrella of the co-op movement, saving a fortune one way or the other !

So why don’t all those millions of tenants out there being ripped off by the greedy rental market with it’s substandard, grossly overpriced accommodation, seem to know anything about setting up a co-op so they can effectively become their own landlord.

By the way Housing benefit can be used to pay this rent too.

I would like to set up a housing co-op but still haven’t found anyone bright enough to want to join me.

Can anyone explain why ? And why other people haven’t cottoned on to the idea of setting up loads of housing co-ops all over the UK which would eventually cut the legs completely off the private landlords and make them an extinct species !

Any answers anyone ?

G_M

mohawk wrote: »

So why don’t all those millions of tenants out there being ripped off by the greedy rental market with it’s substandard, grossly overpriced accommodation, seem to know anything about setting up a co-op so they can effectively become there own landlord.

There are so few coops like this that they are not well known. That's why

I would like to set up a housing co-op but still haven’t found anyone bright enough to want to join me.

Can anyone explain why ?
Because it's a commitment? Tenancies are flexible. Tenants can leave, move etc with flexibility. Once ou 'invest' in a Coop, like a home-owner you are tied in to the property
And why other people haven’t cottoned on to the idea of setting up loads of housing co-ops all over the UK which would eventually cut the legs completely off the private landlords and make them an extinct species !

Having said that, there are clear benefits for certain people in Cooperatives.

http://cch.coop/

http://england.shelter.org.uk/get_advice/social_housing/housing_association_tenancies/housing_co-operatives

http://www.cds.coop/

http://rch.coop/

http://www.coophomes.coop/custom/1/homepage/default.aspx

Peter333

Hmmmmm, not sure.

mohawk

Not sure about what exactly ?

mohawk

"Because it's a commitment? Tenancies are flexible. Tenants can leave, move etc with flexibility. Once you 'invest' in a Coop, like a home-owner you are tied in to the property"

No you are not tied in.

If you know you want to stay put for more than six months, more than a year or longer so what of the 'commitment'. Every one of the millions of homeowners make the same commitment so why should it be magically something too terrifying for a tenant ? After all there is a huge financial reward, just like there is for homeowners.

But I would also point out it is far more of a hassle for a home owner to sell up & move than it would be to leave a co-op. A tenant in a co-op could leave just as easily as any other tenant, except they would be leaving with a pile of money, all things being equal.

BBen

mohawk wrote: »

A tenant in a co-op could leave just as easily as any other tenant, except they would be leaving with a pile of money, all things being equal.

It's not an investment, under most co-operative models it's not possible to profit from it as an individual, because the home must stay within the co-operative movement. If you leave, you lose what you have put into it. Having "rent already paid returned as a lump sum" is a rare form of co-operative indeed - occasionally an incoming member will 'buy' a former member out but this will only be the case where they really want to live within a co-op because with the amounts involved that person would have the choice of putting a deposit down on their own house. But if you plan to stay there for the rest of your life, you would have the same benefits as a homeowner.

Its hard to raise a mortgage on, you have to use very specialist providers at poor rates, so it may not be any cheaper. And you still have to raise a deposit either amongst yourselves or from the wider co-operative movement as a loan and they would require the proper co-operative principles and a good business plan to be in place.

collective control -> collective responsibility. You have all the hassle of organising and paying for all the repairs and maintenance, collectively with people who you might not like or have anything in common with.

Sounds hellish to me.

PasturesNew

About 30 years ago I knew somebody who lived in one, here: http://www.ash.coop/
Place was nice enough, but everybody was a hippy, unemployed, singe mothers, and/or taking drugs. I went to a party there one night too ... that was mega wild, I dossed on the sofa until my mate finished doing somebody upstairs

As they were hippies, all the rooms/walls/doors were painted blue, yellow, green, red, purple.... you know the sort of colour schemes.

mohawk

BBen wrote: »

It's not an investment, under most co-operative models it's not possible to profit from it as an individual, because the home must stay within the co-operative movement. If you leave, you lose what you have put into it. Having "rent already paid returned as a lump sum" is a rare form of co-operative indeed - occasionally an incoming member will 'buy' a former member out but this will only be the case where they really want to live within a co-op because with the amounts involved that person would have the choice of putting a deposit down on their own house. But if you plan to stay there for the rest of your life, you would have the same benefits as a homeowner.

Its hard to raise a mortgage on, you have to use very specialist providers at poor rates, so it may not be any cheaper. And you still have to raise a deposit either amongst yourselves or from the wider co-operative movement as a loan and they would require the proper co-operative principles and a good business plan to be in place.

collective control -> collective responsibility. You have all the hassle of organising and paying for all the repairs and maintenance, collectively with people who you might not like or have anything in common with.

Sounds hellish to me.

All of your information is incorrect.

I have spent over a year researching co-ops and spent about three years studying law at the Open University, so have a fairly good idea of what I am talking about.

You are describing some co-ops that have decided to set themselves up in the particular way you mention. But a co-op can be organised in different ways as the members think fit.

In particular, there is a co-op in Somerset which has pioneered a legal structure that allows their housing co-op members to accrue cash which is available on leaving the co-op.

Also in the model you describe tenants benefit from lower rents as the co-op become wealthier by means of it's mortgage being paid off by the rents - just like ordinary homeowners.

To describe this as hellish when it is infinitely superior to private landlord renting is puerile & silly.

mohawk

About ASH Co-op


The Argyle Street Housing Co-operative (ASH Co-op or, more commonly, the Co-op) is a housing co-operative in Cambridge offering shared accommodation for individuals who wish to have greater control over their housing situation than that offered by ordinary rented accommodation. All on one site and situated around four communal gardens, we offer a range of four, six and ten person houses for single people and a number of two-room flats, predominantly occupied by single parents and couples with children but also by people with special circumstances.

Fundamental to our policy is that of equal opportunities so that members may live and work together co-operatively without fear of discrimination based on gender and sexual preference, race, religion, disability or indeed anything else which may compromise their effective involvement in the organisation and running of the community in which they live.

Member involvement drives ASH Co-op. By the notion of ‘work together’ we mean getting together and acting to do the things that would ordinarily be undertaken, with varying degrees of tenant satisfaction, by profit motivated landlords or the impersonal bureaucracy of regular Housing Associations. From the banalities of rent collection, maintenance and repairs to the more spirited activities of community development and celebration.

Members move on for all sorts of reasons. Hence there is always room for new members with vibrant personalities and creative views to enable us to continue to grow, evolve and, above all, further the ideal a collective community based on equality and fairness. If this appeals to you we welcome you to join us.

Lord_Baltimore

PasturesNew wrote: »

.... you know the sort of colour schemes.

Yes, the conceived whilst on LSD variety of colour scheme .

As for a co-op, what utter drivel. You can't afford a house can you mohawk?

mohawk

It seems this co-op being sneered at has now grown so wealthy it has 22 separate dwellings.

Here is an extract in an article from the Cambridge News about it's success.

Most people who have rented a home in Cambridge have a horror story or two to tell about landlords, and these same tenants are finding it harder than ever to get on the ladder themselves as house prices soar.

But there is another way – as proved by 84 people living together off Mill Road in the city’s only housing “co-operative”, which makes them, in effect, their own landlords.

Hugging the railway line in Argyle Street, Romsey, there are 22 units, some of them one-bedroom flats, some of them family houses, and others larger six-bedroom and 10-bedroom properties.

All the decisions about what happens in the co-operative – be it rent levels, maintenance, or anything else – are taken by the residents together.

And while the committee employs two coordinators, much of the work around the community – from tending to the grounds to keeping the books and from redecorating flats to fixing the office computers – is carried out by the tenants themselves.

The co-operative has been there for 30 years, and isn’t just occupied by ageing hippies.

There are families, young professionals and retired folk mixing happily here.