We’re evolving these as our core group forms...
A quick summary of the plan…
Earthrise is looking to purchase a large house/farm with outbuildings or holiday cottages so that between 4 to 5 families can initially live there. This would accommodate around 10 adults and their respective children in the community.
The main house will inevitably require subdividing so each family has a separate living space with bedrooms, kitchen and bathroom. The community space will have a larger kitchen and gathering space located in a barn or large outbuilding. The other outbuildings or holiday cottages are hoped to provide good accommodation for families with eco-retro fits and improvements a part of the plan.
Our first choice of location is in South Devon and this is where we will focus our search. As Earthrise is a semi-rural community, we have been looking in locations close (1-5 miles away) to towns such as Totnes or Kingsbridge. This allows community members easy access to local towns for work and connections with the larger community.
A brief property search using Rightmove shows that a number of properties with land in these areas are available with prices from £1 million to £2 million+, although not all these properties would be suitable for our purposes.
The financial model – ‘Mutual Ownership’
The property will be purchased with capital from each family and a joint mortgage provided by the Ecology Building Society, who actively support cohousing communities.
To keep the mortgage from the Ecology Building Society relatively affordable we will ideally need a deposit of about 50-60% of the whole purchase price. So, for Earthrise this would mean 4 to 5 families having capital totalling £700k - £900k to purchase a property worth £1.3 million to £1.8 million.
The homes (called “private units”) will not be for individual sale; instead a system will be set up in which all community members mutually own everything. Each of the private units will have a value which includes a share of the land and communal buildings. Each family’s capital is a loan against the private unit and they sign an “equity loan agreement” with the Company. For a more detailed explanation of Mutual Ownership in co-housing (from another project) see here.
The initial stage
Ideally, we are looking for 5 families to purchase a property worth approximately £1.3 million. Each family would invest around £200k of their own money into the community and service a mortgage of around £100k each, which equates to capital repayments of about £500/month/family. Exact amounts depend on the unit they are moving into.
The total capital invested from the 5 families would therefore be around £1 million with a total mortgage of £500k. This would leave £200k above the purchase price for stamp duty and additional development expenses.
The breakdown of these expenses could look something like this, (to be worked out as a group with the specific property)....
|UNIT||UNIT TYPE||CAPITAL||MORTGAGE REPAYMENT|
|3||2 Bed||£150K||(£500pm) to be worked out|
|4||3/4 Bed||£250K||(£500pm) to be worked out|
The property and land will be purchased as a non-profit company limited by guarantee and therefore the freehold of the property is owned by the company. Each family then becomes an equity holder of the company and using a set of legal agreements, each family has a legal holding in the company. Members equally own the land and buildings as part of the ‘Mutual Ownership’ system.
What happens to my money if I wanted to leave Earthrise?
Our financial model aims to make it easy for you and your family to leave Earthrise should your circumstances change. We would need to find a new family that was aligned with the guiding principles of Earthrise to buy into the community. So for example if you had invested £200k into the community we would need to find a new family that could invest this amount to essentially buy you out. As intentional communities are becoming more sought after we don’t envisage this being a problem.
Does this sort of financially model work in the ‘real’ world?
The Trelay co-housing community in Cornwall has existed for 12 years and they use a similar financial model. Manningham community is acquiring a house in Cornwall at the moment and they too are using a similar model.
What if you’re a family without the capital?
In line with the Mutual Ownership model, we are hoping there will be an opportunity to develop/renovate further units on the site so that families with less or no capital can also join. They would take on some of the mortgage repayment and build up equity. However, as we don’t know what the property will consist of yet, we can’t commit to this part of the plan at this stage. For a document, from another project, describing the benefits of this for both those with and without capital see here.
What is needed to create Earthrise?
🌟People and families aligned with the Earthrise community vision and guiding principles.
🌟A business plan to acquire the mortgage from the Ecology Building Society
🌟A property with land that fits our needs
🌟Listening to one another so we can find synergy in our process and learning together with fun along the way
🌟 Capital to purchase Earthrise and the ability of members to make mortgage repayments.
Who’s creating Earthrise?
All of us! Earthrise relies on the adage ‘many hands make light work’. We welcome those of you that would like to look for properties to do so. Those of you that are a dab hand at spread sheets to contribute to the business plan for the company mortgage. Those of you that want to initiate a meet up to go camping or glamping or rent a house for a few days to do so. We welcome a flow of possibilities towards building a life together that we all want to live.
The bottom line
We need to have at least 4 - 5 families with around £200k of capital.
We need to be able to act fast if the ‘right’ property and land presents itself to us so we need a ready prepared business plan and committed folk to go for it.
Nickee and Edward are attending a 6-week course run by Jackie Carpenter who is a director of the UK Cohousing Network and founding member of Trelay and Manningham Cohousing Communities in Cornwall. Jackie has very generously made available a huge amount of resources, legal and financial agreements and plans for us to use.
Commitments of community members
Living a rewarding, healthy community life involves a high level of work and relational investment as well as a financial one. We will work out a fair work policy together and require members to regularly attend meetings and circles. Earthrise is our main residence, so part-time members are not accepted. We all agree to undertake consensus decision-making and conflict-resolution training.
The dissolution of the community
If we couldn’t continue as a community, we will agree how we would dissolve the legal entity and sell our property.
Keeping our children safe
Our priority is to keep our community a safe and respectful place for all. Body autonomy, respect and consent are openly discussed, especially with our children. We will all make checks through the Child Sex Offender Disclosure Scheme and ‘Clare’s Law’, also known as the Domestic Violence Disclosure Scheme, for all adults living or volunteering at Earthrise. We’ll decide on the need for DBS checks as we establish.
Our pets can be loving and vital members of community life. They can also cause problems. Dogs in communities become hunting packs and cats too can have an impact on biodiversity. Noise issues, fleas etc all need to be thought about. We will develop a policy to limit these issues before people buy in.
Communications and conflict policy
Healthy relationships are essential to the sustainability of our community and all members agree to do our best to live by our guiding principles. One of our first tasks as a forming community is to decide on how we communicate and resolve conflicts.
Visitors, guests and parties
To be decided….
Upkeep of communal areas
To be decided….