UK Cohousing Conference 2015

• Who are we and what do we do?

• Types and sources of finance

• Lending for Community-led Housing at EBS

• Pricing for environmental excellence

• Developing a business case

•A few tips

Jon Lee, Business Development Manager

EBS - Who we are

• Established 1981 – most recent building society created

• Initial focus – low-impact living

• Assets: £138 million

• Mortgage book value: £100 million+

• Mutual – owned by the 9,500 members of the Society

• Specialists - only building society that lends exclusively for environmental and community projects

Types and sources of funding

• HCA affordable housing / custom build funds• Partnering with an RSL• Donations, deposits and fundraising• Private loan stock / investments – care re terms and

security• “Cohousing friendly” lenders – Ecology, Triodos,

Charity Bank• Development phase, longer term finance of

communally owned assets• Residential mortgage lenders

About our mortgages

• We fund eco new builds (including self-build), conversions, renovations and energy efficiency improvements

• We support housing cooperatives, CLTs, Cohousing, community ownership, eco businesses, organic smallholdings and small woodlands

• Our C-Change mortgage discounts reward energy efficient properties and sustainable home improvements

• We offer long-term value through low fees, transparent pricing and customer service direct from our HQ

• Current Standard Variable Rate is 5.75% for cohousing groups and 4.90% for residential borrowers

Community led Housing mortgages

• Ability to lend towards purchase of land with planning consents

• Self-build does not necessarily mean DIY• Stage payments available benchmarked against the

increasing value of the plot / site• Discounts for ecological and energy efficient homes

on completion for the remainder of the mortgage• “Affinity” mortgage schemes available to members,

including bridging facilities where applicable• Development finance for groups available

C-Change Sustainable Homes

Level Discount % Standards CO2 Emissions

1 0.5 EPC ‘B’

2 0.75 EPC ‘A’AECB Silver (Carbonlite step 1)CSH Code Level 4 22kg/m2pa

3 1.00 CSH Code Level 5

4 1.25 AECB Gold (Carbonlite step 3)CSH Code Level 6Passivhaus and EnerPHit

4kg/m2pa

• Since 1991 around 30,000 Passivhaus projects have been completed world-wide, mostly in Germany and Austria

• The Passivhaus Standard is now the leading international low-energy standard• The Passivhaus is a building concept that can be adopted by anyone! 

Weber pre-fabricated timber frame Passivhaus, Germany (photograph KP ArCreation)

Passivhaus

Passivhaus Cohousing - Lancaster

The evidence….

Developing a business case

• Governance, skills and structure• Aims / Market research• Financial budgets and forecasts, funding required for

the group and individuals?• Articulating the business plan• Establishing performance monitoring tools and skills• The Marketing Plan, member engagement, channels of

communication• Developing a partnership approach with funders and

advisors

A few tips

• Know your budget and requirements as a group and as individuals and be realistic

• Stress test your assumptions (plot, labour, materials and professionals costs, interest rates, time, cash flow)

• Select appropriate designers and contractors• Design in Passivhaus / air tightness specifications

from the start• Consider your rules and terms of leases. Are they

practical and “fundable”?• Talk to a few lenders and RICS approved valuers• Ask if there is a valuation panel policy at lenders

A few tips

•Check Loan to Value ratios and how draw downs are signed off

•Have a robust project cash flow model including contingencies

•If a mortgage is required for your own residence, be aware of affordability checks and do not assume any projected income will be included by your lender

•Be aware that project spend and sweat equity does not equate to increases in interim values on the project

•Above all, choose partners that understand what you are trying to achieve and don’t look at you like you have three heads!

Thanks for listening!

• Any questions?

• Jon Lee, 01535 650774

• jlee@ecology.co.uk

• www.ecology.co.uk