My home, like many people’s, is a place of solace and comfort. It’s somewhere I’ve worked through the end of a long-term relationship, hosted parties, waged an ongoing war with a squirrel in my garden and housed my extensive condiment collection. Despite my emotional ties to this place, I do not own it. Like the other 13 million people in the UK who rent from private landlords, that puts me in a permanently precarious situation. I am at the behest of a landlord, who can evict me for no reason, at any time.
In this state of uncertainty, you can be reminded of your powerlessness at any moment. That moment came for me and my housemates towards the end of last year, when we found out that our landlords were considering selling. So what did three young professionals with no rich benefactors but an unusually large understanding of housing policy do? We decided to try to turn our house into a cooperative.
The housing cooperative movement has become a striking alternative to a profit-driven housing market. In simple terms, turning a house into a co-op brings a property under collective ownership, where members can come and go and ensure that a house remains under not-for-profit ownership in perpetuity. Once the cost of the property has been paid off, rents in the co-op can drop to the minimal levels needed to fund repairs and other minor costs, forming a home that can be rented affordably and well below market rate. It’s also sustainable – any surplus rent saved can be used to get other housing co-ops off the ground.
The modern cooperative movement has origins in 19th-century England and France, with one of the first housing cooperatives appearing in Spotland Road, Rochdale, in 1861. Cooperatives are still found across the world today (in Sweden, 23% of homes are cooperatives). Here in the UK, however, the sector is far smaller and the movement has slowed over the past 50 years. There have been some notable exceptions, and cooperatives have received some political support from the Green party. But in the UK, there are are mere 685 housing co-operatives in total. The low figures are partly due to the immense rise in property prices since the 1980s, coupled with a lack of government support and a cultural obsession with private homeownership.
Advice on the process of creating a co-op is often outdated. There are some archaic guides, usually written in the early millennium around the birth of the internet. A 2003 guide by Radical Routes recommends, endearingly, fundraising “to cover telephone, postage and stationery” costs. The lack of recent guidance on how to create your own co-op points to a struggling movement.
However, it is far from impossible. If you already have a property in mind, the first step is building a business plan – which in its most basic form is a spreadsheet that works out the projected cost of the project (though at a final stage this becomes slightly more complex). This business plan would include the cost of paying back a mortgage, paying other costs such as ground rent (if it’s a leasehold), bills and housing insurance.
Ethical lenders such as Triodos Bank will lend you 70% of the cost of the property against your normal rent, rather than your collective incomes, so you’re probably going to have to find the money for the other 30% yourself. That’s another row in the spreadsheet. At the end, you divide this number by the number of tenants, and you create an estimated monthly rent. You’ll need to get the landlords to agree to sell at an affordable price – potentially slightly below market rate (you are saving them estate agent fees, guaranteeing a chain-free sale and making them feel morally righteous, after all). After that, you incorporate the cooperative with a name, and register it for a small fee with the help of cooperative organisations such as Catalyst Collective. With all the above, you must then apply for a mortgage, find that 30% or fundraise for it, create co-op rules, and finally, buy the house. Ta-da: you have a co-op.
In many ways, it’s a perfect solution to the housing crisis. By increasing the cooperative housing stock, co-ops create more affordable rooms and reduce the number of private tenancies that statistically are of a poorer standard, subject to unregulated rent hikes and no-fault evictions. They also ensure the house remains something for people to live in rather than an asset (a concept that has bemused many friends of mine). In sentimental terms, tenants suddenly regain control over the space. In London, where rent can make up 38% of renters’ incomes (or more if you’re young), it’s one of the few prospects for stable, affordable living.
Of course, building a cooperative is not easy in today’s housing market. Historically, fundraising 30% of a property’s value was achievable. Indeed, many co-ops began as squats. Today, when house prices in the capital are 448% higher than in 1971, it’s crippling. By our calculations, we may have to find at least £100,000 upfront in order to turn our home into a cooperative, on top of the monthly costs to pay off the mortgage and other associated costs. That would bring up our monthly rent by hundreds of pounds, making the prospect unviable.
Right now, turning our house into a co-op seems like an unrealistic prospect. Our landlords are receptive to the idea but of course would like to realise the best price for their property. The motivation to find some small way to evade the crippling housing crisis in this country is overwhelming, and between the Trello cards and Excel spreadsheets, I’m trying not to give up hope on our housing co-op just yet.
• Ruby Lott-Lavigna is a senior staff writer at Vice UK
• This article was amended on 7 February 2022. Prospective co-operatives would likely have to fund 30% of a property’s value if mortgaging with an ethical lender, not 20% as an earlier version stated several times.
