Create a Common Ground Trust
Buying land from underneath houses and leasing it to members will expand the number of people ready to buy a house.
The Common Ground Trust would buy land from underneath houses and lease it to members, making homeownership possible for those who currently cannot meet mortgage deposit requirements. Households or housing coops would ask the trust to buy the land beneath a house they wanted to buy, while seeking normal mortgage finance to cover the cost of the bricks and mortar. Since bricks and mortar can account for as little as 30% of the price of a property, this would require people to save much lower deposits than is usual.
The new buyers would sign a lease with the trust which would entitle them to exclusive and indefinite use of the land in return for paying a land rent. When moving house, members of the trust – a publicly backed but independent, non-profit institution – would sell only the bricks and mortar. The title to the land itself would remain with trust, and the lease (and obligation to pay land rent) would transfer to the new occupant.
Once the trust had accrued a surplus this would be pooled and used to fund a ‘rainy days and retirement discount’ for members. This would help to improve the attractiveness of the scheme compared to both renting and the mainstream model of mortgaged homeownership since it would improve security of tenure for members who had fallen on hard times, and/or were unable to work any longer.
In short, the Common Ground Trust would be a vehicle for bringing land under existing homes into common ownership, with three goals in mind:
- To reduce the scale of land rents that are siphoned off and pocketed by financiers and landlords, and to use those rents instead to provide a safety net for members who have hit hard times.
- To create a pool of aspiring homeowners ready and able to buy as landlords and investors exit the housing market.
- To give more people the opportunity to access a form of home ownership. Even with improved conditions in the private rented sector, many people will desire a home they can substantially renovate and invest in, and the peace of mind that they will never be served an eviction notice.
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Policy in practice
Projects that demonstrate the benefits or may be helped by polices like this.
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