Our Aims
Tackling Homelessness
According to the homelessness charity Shelter the number of households in Scotland accepted as homeless or potentially homeless has increased by 25 per cent since 2000-2001.
Research in 2008 by the New Economics Foundation indicated an annual cost to the state of £26,000 for each homeless person. Those who experience a period of homelessness are far more likely to need acute health services, go through the criminal justice system, stay in expensive temporary accommodation and have prolonged periods on welfare benefits.
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However bald facts don’t do justice to the specific and lasting damage that homelessness causes, particularly to children. An estimated 1,200 children in Scotland were in families evicted from social housing in 2009-10, usually for rent arrears. This means that approximately three children a day lose their home due to eviction. Most damning of all, roughly sixty children a day become homeless somewhere in Scotland. That is enough to fill three primary one classes every day and is a total of 22,000 children a year. Nearly half of all homeless children (46 per cent) are under five years old.
Radical Changes
At the end of 2012 The Scottish Government passed legislation which aimed to effectively end homelessness in Scotland. This means that everyone in Scotland who is unintentionally homeless now has the right to permanent accommodation.
At the Caledonian Foundation we can play a key role in fulfilling this commitment. We believe our home ownership model will help to prevent homelessness occurring in the first place, by helping to address its root causes.
Fighting Repossession
Recent research has shown that one in four households in Scotland are just one pay cheque away from losing their home. That’s the equivalent of 647,400 people.
One in four families with children now say that they would struggle to continue to pay their mortgage for more than a month if they were to lose their job. Factors such as the rising cost of living, government austerity and high energy bills are forcing substantial numbers of families to face the prospect of losing their home.
At the Caledonian Foundation we want to put an end to the distress associated with the high cost of mortgages and the threat of repossession. We know that our model can deliver a sustainable financial future for homeowners.
As an integral part of our projects we’ll be working with families facing such difficulties, effectively purchasing their house on their behalf and offering them the chance to buy it back one share at a time.
Making Homes Affordable
The housing market has gone through many upheavals in recent decades. In February 2013 home ownership in the UK fell to its lowest level since 1987, marking an abrupt end to a trend that saw it peak at 70.9 per cent of households in 2003. The financial crisis of 2007 showed the world that credit based housing markets are inherently unstable, and that in the long run, no one is safe when a property boom goes bust.
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In Scotland the average house price has increased from £73,570 in 2001 to £179,863 in 2011, a massive increase of 144 per cent.
Owning a house in today’s market is major financial undertaking that often relies on other forms of capital such as inherited wealth, even if the owners in question have well paid jobs. More and more people are simply priced out of the market.
Our model will be based on a portfolio of properties, with roughly 5 tenants paying market rent, supporting one low-income tenant paying affordable rent. However, even when paying a market rent 10% is gifted back to them in shares – so in effect they are paying 90% rent.
MEHO makes much more sense for everyone.
Providing Community Facilities
We believe that the process of making safe places to live does not begin and end at people’s front doors. We know that thriving communities are just as important to achieving all of our aims. Scotland has been scarred with many housing projects which failed to provide homes where families could bring up children and individuals to reach their full potential. People don’t just live in homes, they live in villages, streets, towns and cities. Quality housing stock is just one ingredient in making communities that people want to live in.
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Examples of how MEHO can be put to work to create community facilities include:
- Renovating a historic building to provide units for social enterprises.
- Investing in a community centre, or shops to make sure that the homes we build, refurbish and buy have access to the amenities that they need.
- Providing capital for services that would benefit a community, such as a youth hostel or a food coop.
Essentially the Caledonian Foundation wants to help communities thrive by unlocking capital for investment in housing and local facilities. Therefore the development of a particular project is entirely in the hands of the board that sets it up. The Caledonian Foundation will facilitate this process so that all manner of places, from remote villages, to urban housing estates will have the opportunity to undertake sustainable regeneration and development on their own terms.