Innovative partnerships and income-generating subsidiaries are just a few of the ways social housing providers are tackling the housing crisis. Carolyn Sims, Charity Bank's head of banking, gives a quick look at Charity Bank's lending in the housing sector.
Having a decent place to call home can lay the foundation for a better life. Yet in 2015 we still face the harsh reality that people are living in substandard homes, waiting to be housed or stuck in a rental cycle because they can’t afford a mortgage.
Charity Bank has been lending to charities, social enterprises and social housing providers since 2002. Among a wide range of borrowers in different sectors, the most common use for our loans is to provide affordable housing and support for residents.
With the help of Charity Bank loans, social housing providers are undertaking a range of activities to adress the housing crisis, including
- improving and building affordable houses, so that more people can live in good quality homes
- partnering to set up social ventures that support people living in social housing
- launching subsidiaries that generate revenue to invest in social housing
To give you an idea of what this looks like in practice, here are just a few examples of the organisations that have borrowed from us and how they are using their loans:
Broadacres Services Ltd: a subsidiary that’s boosting funds for a housing association
Broadacres Services Ltd is an unregistered development subsidiary of the large registered social landlord, Broadacres Housing Association, which owns and provides services to approximately 5,600 homes in North Yorkshire. Charity Bank agreed to provide a loan to Broadacres Services Limited to support the construction of homes for outright sale at market value. Sale surpluses will be used by Broadacres Housing Association to support its mission to tackle the lack of affordable homes and inadequate support for the vulnerable.
Homes for Good: a social enterprise creating more affordable homes
Homes for Good CIC (a Community Interest Company) is the first letting agency in Scotland to rent homes exclusively to people on social housing waiting lists, providing advice on budgeting and helping with financial planning. Founder Susan Aktemel set up a sister company, Homes for Good Investments, a joint venture with social investor Impact Ventures UK (IVUK), to acquire and refurbish rundown properties that will be rented to people on low incomes or benefits. With a loan from Charity Bank and investment from IVUK, Homes for Good Investments aims to make 120 properties available over the next eight years.
The Smarterbuys Store: a scheme to support social tenants
The Smarterbuys Store was set up by Derwentside Homes, the Prince Bishops Community Bank and the Northern Housing Consortium to promote the financial inclusion of people on low incomes and help them furnish their homes. The scheme aims to help people living in social housing obtain affordable finance to purchase furniture, white goods and electrical items. People can pay for items over a two-year term on a weekly basis, with part of the weekly payment going into a Prince Bishops Community Bank savings account, thereby helping tenants save regularly.
After the initial success of the pilot phase, a Charity Bank loan has been approved to fund the growth of the scheme.
Why borrow from Charity Bank?
We're entirely owned by charitable foundations, trusts and social purpose organisations. So when we say we’re an ethical bank, we mean it. When you come to repay your loan we re-lend the money to other organisations working to benefit people and communities.
What drives us isn’t profits, but a shared idea about the world we want to live in. If you share our outlook, why not work with us?