Frequently Asked Questions
Here are some of the frequently asked questions. If you do not see the answer to your question here, please do not hesitate to contact us.
Repossession FAQs
Who is responsible for maintenance, repairs and buildings insurance?
The land trust is owner of the properties therefore it is responsible for maintenance, repairs and buildings insurance. As residents accrue shares in the land trust, the residents become investors and joint owner of the properties. So the residents are encouraged to look after their home because it is their property also.
How does the model cope with changes to the housing market and inflation levels?
Inflation has been taken into account in the model at the government’s target rate of 2%. You may also adjust the rate of inflation to see how it impacts on the model. The example model assumes that house prices will raise at 2.5 times the rate of inflation. This can also be adjusted to see the effects.
Can landlords at risk of losing their houses be involved?
Yes we can buy their houses into the land trust at an agreed price. The landlords can then pay off their loans and any remaining equity can be retained as cooperative shares in the land trust. The landlords therefore become investors of the land trust.
Homelessness FAQs
What happens if someone loses their job while they are a tenant?
Because 10% of rent paid is transferred by the Land Trust into Gift Shares, the tenant’s equity raised through this scheme can be released in order to pay their rent during temporary financial difficulties. After three months of non-receipt of rent, the Land Trust will endeavour to provide support, access to more suitable accommodation or access to financial and social services as required in order to resolve the situation
How is the MEHO model financially sustainable?
It is based on a proven buy-to-let model – as long as the bank loan to value level is at a controlled and safe level, the appropriate rental level will make it sustainable – as shown in the financial model.
What are the anticipated timescales from a potential tenant applying for MEHO to completion/move-in?
This depends on how quickly the local land trust can raise funds and buy properties. The timescale is the same as any buy-to-let rental model.
Affordable Homes FAQs
I claim Housing Benefit, am I an eligible MEHO tenant?
Individual land trusts will decide which prospective tenants will reside in their properties with the support of external parties. There is no reason why someone claiming Housing Benefit cannot take up residency in a MEHO property; by paying the Housing Benefit rate, you will take longer to acquire equity in the property, but the model is still valid.
What is the minimum share purchase? How is this decided?
Each land trust will set its own minimum share price. The Caledonian Land Trust has set a minimum investment of £100 to ensure that all investors have bought-into the idea in both senses of the word. However, the Caledonian Foundation recognises the value of support from all individuals, which is why it makes use of crowd-funding resources where many people can make a small donation, collectively making a huge impact.
What will you do if someone fails to pay rent?
eeBecause 10% of rent paid is transferred by the land trust into Gift Shares, the tenant’s equity raised through this scheme can be released in order to pay their rent during temporary financial difficulties. After three months of non-receipt of rent, the land trust will endeavour to provide support, access to more suitable accommodation or access to financial and social services as required in order to resolve the situation. In the unfortunate situation that there is no resolution after 6 months non-receipt of rent, the tenant will be evicted in accordance with all legal requirements.
Community Facilities FAQs
Can local councils set up a scheme with our help?
Yes. We can help councils set up their own land trust and build or transfer council houses into the land trust and make them available to council tenants through MEHO.
Who is responsible for maintenance, repairs and buildings insurance?
The land trust is owner of the properties therefore it is responsible for maintenance, repairs and buildings insurance. As residents accrue shares in the land trust, the residents become investors and joint owner of the properties. So the residents are encouraged to look after their home because it is their property also.
How does Micro Equity differ from shared equity?
There are three main differences: 1. Most shared equity schemes require a minimum purchase of a 25% block of shares. This means the buyer might still need to have a certain credit status to apply for a loan and need to have enough income to service the loan. Whereas with Micro Equity, the tenant can buy as little as one share at a time, at £1 per share, without the need to take out a loan. 2. A percentage of rent paid by the tenant is gifted back as gift shares to help him accrue ownership. 3. Friends and family can also buy gift shares to help the tenant accrue ownership. This would strength relationship and bonds.
Faith FAQs
What's the connection between Christian Faith and Housing?
Is the Caledonian Foundation only seeking support from Christians?
How can I find out more?
Funders FAQs
How much of my investment will be applied to the project?
If I make an online donation how much goes to the foundation?
How can I make a donation to The Caledonian Foundation?
a) Give online here
b) Download the donations form from our website and post it to us
c) Set up a standing order
d) Organise an event and send us the donation by post