Building a neighbourhood which is affordable and accessible is a real priority for us. There is much talk of a crisis of affordability in terms of housing. A recent government document highlighted the need to build 70,000 affordable homes per year by 2011. House prices are still much higher than average earnings and the house price to income ratio in the UK is 4.43 (average weekly earnings are £749.93 and average house prices are £172,593).

LILAC responds to this situation. We aim to build 20 homes, which will be managed as part of a mutual home ownership scheme. A MHOS is a new way of owning a stake in the housing market. It is designed to bring the bottom rung of the property ladder back within reach of households on modest incomes in areas where they are priced out of the housing market. It is designed to remain permanently affordable for future generations. Members of the company are the residents who live in the homes it provides. The company and not the individuals obtain the mortgage and so borrowing will be cheaper.

Each member has a lease which gives them the right to democratically control the housing community they live in. Under the terms of the lease, members pay an equity stake to the co-operative and retain equity in the scheme. After deductions for maintenance, insurance etc, these payments pay the mortgage. The payment that leaseholders pay each month and the number of equity stakes they hold depends on how much they earn. Monthly payments are set at around 35% of net income.

As members leave, existing members can buy more equity stakes, and as people’s income levels change their equity stake commitments can also change. Members are encouraged to stay for at least three years, and if they leave sooner then they will not be entitled to increases in the value of their equity stakes. The company keeps a set percentage of any increase in equity to ensure the sustainability of the project.

For more information read -  What is a MHOS? in FAQs.

Is the project affordable for me??

The figures below should help answer this question. They are based on very conservative build costs so if anything we hope the project will actually be more affordable.

The tables show the net income required to live in the project, the deposit required and also reduced income necessary if you have cash to invest.

If you have any further questions contact our finance team via this website - go to the contact us section.

Please note net income is your household income after tax and national insurance payments and any statutory payments such as child support or student loan repayments.

Paying more at the start, i.e. the 10% of the build cost and then some of the equity shares can reduce the minimum income required to live in the project