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Marketing, Sales & Rentals

Your aim in setting up the CLT was to provide homes which are affordable to local people. There are two ways this can be achieved:

  1. by renting homes at affordable rents, generally rents that require no more than 25% of net household income; and/or are no more than 80% of Local Reference Rent (the rent used to calculate Local Housing Allowance)
  2. by selling homes on the basis that the capital payment required to take up ownership or part-ownership is within the means of those you are trying to help.

There are a number of disposal options open to you. In relation to sales the most frequently used methods are freehold sale with an equity mortgage; and lease with restricted staircasing.

An updated housing need audit will identify the housing shortfall that exists and could be the basis for finding buyers and renters: the people in the community who need affordable housing and whom the community needs to retain. Under “who you will house” is an example of a housing allocation policy which will be applied to decide how to set priorities where demand exceeds supply. It may however be that circumstances have changed or the equity to be sold has gone up and you need to widen the area of search beyond the agreed local area. The local authority and the housing association appointed to co-ordinate shared equity sales across your subregion are likely to be the best routes but advertising and marketing through an estate agent may also play a part.

CLTs are not well known or understood nor are the disposal models they use. A leaflet explaining both will be an important tool when communicating the CLT model to prospective buyers and renters, supplemented by a website or arrangements such as open days.

Those applicants who are able to buy through one of the disposal models will generally need to raise a mortgage. Ensuring mortgages are available and affordable will be important in the short and long term: the s106 agreement should therefore have a mortgagee in possession clause and the CLT is advised both the require that it has no objection to the proposed mortgage terms and to have a rent charge.