When I shared our recent journey to settling into our new home one of the things that most interested people was how the finances work. It is also the aspect of co-operative living that seems to present the biggest challenge to banks, government bodies and boomers alike.
In simple terms we are a fully mutual housing co-operative. This means that all of our tenants are members, and all of our members are directors/decision-makers. So while we do all pay rent, we also get a say in what the rent is set at (in our case Local Housing Allowance level) and how that rent is used. At the moment, because we have bought the property thanks to loans from individuals, most of our rent goes towards repaying those individuals over-time - much like you would a mortgage but with much lower interest rates, and in my opinion, less risk (which I’ll come back to later in the power of community).
These loans are called loanstock. When people sign up to invest in the co-operative they can choose their repayment terms and their interest rates - we’re repaying most investors over 5-25 years at rates between 0-5%. Members of the co-op can also invest loanstock - but it’s not a requirement for living here because we believe that access to cash shouldn’t determine access to secure and affordable housing.
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