NewStart Feature: buying a share of your community

Headingley, a leafy suburb of Leeds set two miles outside of the city centre, is perhaps best known for its substantial student population and Ian Botham’s heroics in 1981, but a hugely successful community share scheme could make it a model for community development across the country. Thomas Barrett reports.

Headingley Development Trust launched the share scheme back in February,  and have invited local people and interested parties to purchase shares whilst receiving a healthy 2% return on their investment, with the money going to support the trust with its various community projects.

So far, it’s been a runaway success, and they expect to reach their target of £480,000 when the scheme closes on May 31.

‘We’re trying an innovative free-flowing fund rather than having it attached to a specific project,’ says Richard Norton, vice-chair of the Headingley Development Trust.

‘Under our model, its mainly local people and their money who will support local activity and recirculate money locally,’ he adds.

A 2008  report by Sheffield Hallam University revealed that Headingley had the highest ‘anomie index’ (effectively, the weakest community bonds) in England, but this is changing.

Like many cities in the UK with a large student population, the skyline in Leeds is now dominated with purpose-built student halls of residences, often developed by the universities themselves, meaning demand for terrace properties in places like Headingley has decreased.

‘There was a time when the ward demographics were astonishing, with abnormally high 18-24-year-olds and very high private tenure,’ says Mr Norton.

‘But the conversion of family houses into student houses has to be applied for and is now usually refused. At the same time, estate agents report more sales going to private buyers than student landlords.’

Financially sustainable

Headingley Development Trust (HDT) was set up over 10 years ago to help generate enterprise-based activities for the area. The idea was born when a primary school closed and it was feared that it could be demolished and put out of community use.

Eventually, Leeds City Council transferred the building to the HDT following a previous community share issue which raised over £100,000. The building was transformed into the Headingley Enterprise and Arts Centre (Heart), and is now a space for arts, performance, events, offices, co-working and a café.

They say the share issue was fundamental to unlocking both the political support and the other sources of grant and loan funding that were needed in order to get the Heart project up and running.

The original shareholders have remained fully committed and less than £3,000 has been withdrawn to date. No interest was offered or has ever been paid on those shares.

For HDT’s new share offer, they have three goals in mind. They want to refinance a loan they took out for social investors when setting up Heart which they say will allow them to keep and invest more of their profits back into the facilities.

They also want to develop new project ideas and enterprises that ‘respond to opportunities in the local area and meet the aspirations of the community,’ without having to rely solely on securing external funding.

Their Headingley Homes project, which has been a profitable business providing secure homes for people who want to commit to the area, is also a key part of what they are hoping to achieve in the area.

One of the projects undertaken by the HDT is the ‘Headingley Homes’ housing project, which aims to help to balance Headingley neighbourhood by providing affordable homes to rent or buy for long-term residents.

Their initial portfolio comprises of one house that we have bought and several that we have leased from public-spirited local owners, to let to individuals and families.

Mr Norton says one of the things unusual about this offer was that they weren’t attaching it specifically to a single project.

‘We deliberately and riskily raised against unspecified activities,’ he says.

The group have their eyes on an old community centre which was auctioned off for private use by the council and has remained empty ever since. It’s part of their wider strategy to bring empty properties in the area back into use.

‘We have over 1000 members in the trust already. People have delivered on that by putting money in. It’s drawn in new members and attracted investment from outside Leeds. ‘

‘That concept and that model may also be something that’s interested people who rent in the local area.’

A stake in the community

They’ve found a model in Headingley which they believe proves having a financial stake in a place helps to strengthen community bonds, and a survey from the trust revealed that 80% thought there is a greater sense of community in Headingley than there was seven years ago. Admittedly, what works in a relatively affluent area like Headingley may not work in Gipton or Beeston, but they’ve ensured a low point of entry with a minimum investment of £200.

‘It’s not going to work everywhere, you need to have a local community where there is a level of wealth so they can put money in,’ says Mr Norton.

‘We want to move to an open offer and present it as an alternative to putting your money in a building society. We can offer a modest rate of interest and people can put money in and take it out. Then you can see how it becomes a kind of model for people supporting money locally with their savings.

Mr Norton says being predominantly community funded has been a good thing for them as it has meant they’ve not been in the position that so many organisations have found themselves in, desperately trying to raise the next grant or wondering how they are going to pay staff. They say they have a firm base to build from and are excited to continue proving that social enterprises can be financially sustainable prospects for the community.

‘The fund is working. If we are able to secure the old community centre that could have a significant impact and bring a blighted building into use pro-social purpose.’

‘If we could achieve that, that would be tremendous.’

Read more about the HDT here