The community of Closeburn in Dumfries and Galloway has been able to buy a three-bedroom house to rent to a local family living in an unheated caravan thanks to a loan of £47,000 from Charity Bank.
Nith Valley LEAF Trust, set up as a charity with the support of Closeburn Community Council, was awarded £35,000 in 2013 by the SSE Clyde (Dumfries and Galloway) Fund to help buy a newly-built house in the village which has a population of around 1,000.
Local residents needing accommodation are often re-located to housing in other areas, losing links with their home community. The Trust was determined to help by allocating the house they intended to buy to families with a local connection.
The Trust, Dumfries and Galloway Homes Ltd, and Dumfries and Galloway Small Communities Housing Trust worked together to identify an opportunity to buy a new three-bedroom semi-detached house. They developed an allocations policy to make it available to local people and established a management agreement with Dumfries and Galloway Homes Ltd.
The purchase price of the property was discounted by 38% to £81,000 by means of a planning gain agreement negotiated by Dumfries & Galloway Small Communities Housing Trust. With the SSE Clyde (Dumfries and Galloway) Fund‘s £35,000 grant and the Trust’s own cash resources, the Trust needed a loan of £47,000 to buy the house.
The Trust was initially turned down by a specialist lender before Charity Bank agreed to make this loan.
The first tenant, Tanya Mcgaw, says, “We have been looking for a place to live in the village to bring up our children for over seven years and are so pleased to have the opportunity to rent the community house. It means we can stay amongst friends and family in a brand new house rather than move away, and the children can continue to go to nursery at Closeburn Primary.”
Mike Steele, Chairman of Nith Valley LEAF Trust, says, “Small communities like ours face all sorts of problems related to their size. It was therefore ironic that we were turned down by a specialist lender because the amount we wanted to borrow was too small. Fortunately, Charity Bank was completely in tune with what we wanted to do and helped us a great deal along the way.
They were very thorough and very hands on. We were so pleased when they offered us a 25-year loan for the amount we needed.”
Jamie Dent, CEO of Dumfries and Galloway Small Communities Housing Trust, adds, “This is a ground breaking scheme for several reasons. It is the first occasion in Scotland that rural community- owned housing, partly paid for by windfarm community benefit funds, has been developed without any public funding. In the longer term it will provide a source of income to the community. Most importantly, it provides high quality affordable housing to rent that can be allocated according to local needs.
“Charity Bank has played an essential role in this process which we hope this will be the first of many similar schemes where communities play a direct role meeting local housing needs.”
John Barnett, Charity Bank’s lending manager responsible for Scotland, says, “Charity Bank was set up to help organisations that are trying to do good in their communities but that are often overlooked by mainstream banks and other lenders.
“Although one house in one village might sound small, it will have a disproportionately good impact on the community. Nith Valley LEAF Trust estimates that some 30 local families could benefit from this social housing project over the 90-year expected life of the house. In the longer term, this initiative could have a significant impact on the local socio-economic environment: allowing more young people to live and work in the local area rather than having to move away, and encouraging a sustainable community to develop. Once the mortgage has been repaid, the Trust will also have secured a financial asset for the benefit of the community.
“Whilst the bank can now lend up to £2.5 million, our £47,000 loan to the Trust’s first small housing project underlines our continued commitment to providing support to small social sector organisations.”
Nith Valley LEAF Trust says it will explore the possibility of extending its housing provision, developing a broader stock of locally-owned, locally-focused low cost housing. “This might look like one small step for affordable housing,” says Mike Steele, “but we believe it’s the first giant leap for our community. We will be looking to the Charity Bank for support for our future developments.”