Ecology Lenders Move Into Affordable Homes In London
The first residents, including a number of Ecology mortgage borrowers, have now moved into their brand new homes which are being sold by London Community Land Trust (London CLT) at prices less than half their market value.
Ecology has pioneered an innovative solution to provide mortgages for the homes that will be permanently affordable.
St. Clements in Tower Hamlets, London is a housing development of a former Victorian workhouse which will provide 252 new homes including 23 affordable homes for the London Community Land Trust (CLT).
The construction of the CLT homes follows a long grassroots campaign led by charity Citizens UK. The CLT homes are being sold to local residents who meet certain minimum and maximum household criteria at a price linked to local earnings. In order to keep the homes permanently affordable, if the homeowners choose to move, they have to reapply the same formula based on average local incomes when they sell.
The scheme challenges the traditional mortgage market reliance on open market value for underwriting. Ecology developed a bespoke solution which takes account of homes’ permanent affordability and ensures they can lend on this type of scheme.
Humayra, who took out an Ecology mortgage to move into one of the CLT homes, explained what a difference the scheme has made to her family,
“Ecology has helped to make our dream of owning a family home in London possible.”
Ecology is a leading supporter of the Community Land Trust movement which offers a mutual and inclusive approach to tackling local housing need and we are currently working with a number of CLT’s across the UK.
Paul Ellis, Chief Executive at Ecology Building Society explained Ecology’s approach to supporting the scheme,
“Given our long standing commitment to supporting affordable and community-led housing we were delighted to be able to lead the way on the delivery of an innovative solution providing mortgages on these permanently affordable homes. We’d like to extend our best wishes to all our borrowers as they move into their new homes. We also look forward to working with London CLT again in the future as they build more genuinely affordable homes. Finally, we hope that our approach will now enable other lenders to consider this type of housing.”
Published: 12 July 2017
Author: Jennifer Whiteside