MHCLG launches new £4m Community Housing Fund

Posted: 13th September 2021 Bradley Tollon, Senior Development Consultant

MHCLG launches new fund to support the development of Community Led Housing

Launched on the 23rd August 2021, MHCLG’s Community Housing Fund (CHF) Revenue Programme made £4m of grant funding available to eligible community led housing (CLH) organisations across England (outside of the Greater London Authority area).

Who and what is the £4m Community Housing Fund for?

The programme, which follows the Homes England’s 2016- 2020 Community Housing Fund, is designed to support Community Led Housing (CLH) groups in the later phase of pre-development*, helping them cover the cost of project activities such as legal advice, feasibility work and site investigations. This aims to help groups progress their schemes towards:

  • Submitting a planning application.
  • Submitting a capital funding bid.
  • Preparing applications to become a Registered Provider (RP).
  • Getting to start on site.

The funding is therefore not available for forming or newly formed CLH groups that require support for start-up or the early stage of pre-development. To be eligible for funding, the CLH group must be an incorporated body, have a membership of five or more, and be able to demonstrate that their scheme meets the following definition of community led housing:

  • Meaningful community engagement and consent occurs throughout the development process.
  • The community group or organisation will own, manage, or steward the completed homes.
  • The benefits of the scheme to the local area or specified community group are clearly defined and legally protected in perpetuity.

Whilst the prospectus encourages applications from individual groups and developer-community partnerships, it specifies that groups partnering with a housing association will need to be partially funded by that association and demonstrate why CHF grant is needed to make the project viable. Funding will not be granted for homes which were already due to delivered under section 106 agreements. The Community Housing Fund Revenue Programme prospectus provides examples what items of spend will and won’t be covered by the fund.

How will the Community Housing Fund be allocated and managed?

The fund will be managed by Community Led Homes, a partnership between the Confederation of Co-operative Housing, Locality, the National Community Land Trust Network and the UK Cohousing Network.

Funding allocated to groups must be spent by the end of March 2022 and groups will be required to complete two grant monitoring reports following the close of the programme in Spring 2022.

There is no limit on the amount of funding that a single project can receive, however it is expected that the grant will cover no more than 90% of the total costs of a bid. Applicants will therefore be expected to demonstrate how they are able to fund at least 10% of the estimated costs of their proposal through, for example, previously secured grants, partner contributions or community shares.

The scheme is accepting applications up to 31 December 2021 (or until the funding is fully allocated) and bids will be assessed across four key criteria: eligibility, strategic fit, value for money and deliverability. Applicants must therefore ensure they clearly demonstrate and evidence how their proposals meet the required eligibility criteria, contribute to the stated aims of the Community Housing Fund, meet the value for money considerations and are supported by project plans showing how grant funded activities will be completed by March 2022.

What does the funding mean for the sector?

The announcement of the revenue funding programme is welcome news for the growing CLH sector. It will give local people who have been involved in setting up CLH organisations the opportunity to move one step closer to delivering genuinely affordable homes for their communities in perpetuity.

The community-led approach has been identified by the government as a potential growth area for the housing sector. CLH developments typically benefit from the creativity, ambition and drive of local people and the community’s commitment to high-quality design, construction, and energy standards. This benefit is acknowledged in the prospectus by its call for projects that exemplify the use of innovative design, tenures, funding structures and construction methods and products.

The prospectus also acknowledges CLH’s ability to tap into a community’s in-depth understanding of local needs and the way through which this knowledge can be used to develop housing for specific demographic groups. This benefit is also reflected in the prospectus by its call for proposals from schemes that provide housing specifically designed to meet the need of a particular community of interest.

Altair’s work with CLH groups

Altair has worked closely with several CLH groups to provide advice and support on areas such as development viability, grant applications and governance (including RP registration advice). We also provide project management support where we can help groups take schemes through the whole development lifecycle. This includes stages such as land acquisition, planning submission, procuring contractors and wider consultancy teams and project manging developments once they are on site through to practical completion.

If you would like to find out more about the services we provide or how we could support you in submitting a CHF grant application or in the wider delivery of your projects, please contact Bradley Tollon or David Howson at bradley.tollon@altairltd.co.uk or david.howson@altairltd.co.uk.

 

*Note:

Before applying, CLH groups will need to evidence that they have completed all the following tasks listed under milestone 2 of Homes England’s Milestone framework:

  • Necessary professionals are involved
  • Scheme appraisal
  • Outline feasibility study
  • Outline build proposals
  • Outline financing model
  • Viability/feasibility assessment
  • Progress in procurement of the building works
  • Support in principle from the local authority
  • Allocations policy drafted

Similarly, if a CLH group is looking to become an RP they are expected to have already submitted a preliminary application to the Regulator.

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