The legislative and policy background

The Government’s legislative interest in community-led housing has four main elements in England:

The Localism Act 2011

This introduced new rights for communities and set the Government’s context for the recent growth in community-led housing. New rights included a ‘Community Right to Challenge’, enabling a community to register an interest in taking on a local authority service; a ‘Community Right to Bid’, enabling communities to delay the sale of public assets on the open market whilst they secured funding for their own bid, and a ‘Community Right to Build’, enabling groups to bring forward small scale development proposals without the need for planning permission

Although the ‘rights’ have yet to be widely taken up by communities, the Localism Act also introduced Neighbourhood Planning and Neighbourhood Development Plans, which has been quite popular in many rural communities, but less so in urban areas.

The Self-Build and Custom Housebuilding Act 2015 

This introduced Self and Custom Build Registers requiring local authorities to keep a register of individuals and associations of individuals who wish to acquire serviced plots of land for self-build and custom-build projects.  Councils must grant planning permission for enough serviced plots to meet the demand shown on their registers.

The Neighbourhood Planning Act 2017

This strengthened provisions concerning Neighbourhood Development Plans, giving weight to draft plans that have been approved by a local referendum.

The Housing and Regeneration Act 2008

Section 31 of this Act specifies that capital funding for low cost rented homes through Homes England (formerly the Homes and Communities Agency) and the Greater London Authority can only be given to Registered Providers. This is particularly relevant to community-led housing groups intending to access capital funding through the Community Housing Fund (see below), which is now to be routed through Homes England.

Community Land Trusts were first defined in Section 79 of this Act as corporate bodies which are established for furthering the social, economic and environmental interests of a local community by acquiring and managing land and other assets in order to provide benefit to the local community.

In Wales, the devolved Government introduced its first housing legislation in 2014 – the Housing (Wales) Act 2014, which enabled fully mutual housing co-ops to use assured tenancies.  The Renting Homes (Wales) Act 2016 made it simpler and easier to rent a home, replacing various and complex pieces of existing legislation with one clear legal framework.

On the policy and funding side, Government interest in community-led housing in both England and Wales has increased significantly in recent years.

The Community Housing Fund

The Government’s Community Housing Fund, announced in March 2016, provided a highly significant injection of capital and revenue funding to support community-led housing in England, initially intended to be over a five year period. The first year’s funding (£60 million) was distributed to 148 local authorities, with an initial focus on community-led schemes in places with high levels of second homes. However, the limited guidance from DHCLG gave local authorities with allocations a considerable degree of flexibility on how these funds are spent.

In November 2017 the Housing Minister announced that the Community Housing Fund Programme would be continuing until at least 2019/20 and that it would not be restricted to the existing 148 local authorities. Most of the funding has instead been channelled through Homes England on a competitive basis, with community groups and existing Registered Providers able to bid directly for both capital and revenue grants. The first phase of the £163m Community Housing Fund was launched by Homes England in July 2018, with a second phase following in September 2018.

A separate part of the Community Housing Fund was made available through the new CLH umbrella organisation, Community Led Homes, to provide start-up funding for new groups, revenue support for a national accreditation training programme for advisors, growing a national network of enabling hubs, grant funding groups wishing to become Registered Providers and supporting the set up and running costs of Community Led Homes itself.

At the time of writing (February 2020), bids for both the revenue and capital elements of the Community Housing Fund had closed and no announcement has been made by Government about the continuation of the Fund beyond March 2020. 

Homes England (formerly HCA) Shared Ownership and Affordable Homes Programme 2016-2021

Government support for affordable housing has traditionally been channelled through Homes England. There was a significant ring-fenced capital funding programme for community-led housing in the HCA’s 2011-2015 Affordable Homes programme, mainly for affordable rent, but the latest £4.7 billion 2016-2021 SOAHP programme has a strong focus on low cost home ownership products. The 2011-15 programme also included a Community Led Housing Support revenue package.

Additional capital funding of £1.4 billion for the Homes England Shared Ownership and Affordable Homes Programme was announced in the 2016 Autumn Statement and a further £2 billion was added in Autumn 2017. An addendum to the Programme, announced in January 2017, reinstated funding for general needs rented housing.

More information on these and other funding programmes for community-led housing can be found in the Finance section of the Toolkit

Government-sponsored programmes relating to estate regeneration, making use of public sector land, garden villages and garden towns also offer opportunities for community-led housing.  

The Welsh Government 

The Welsh Government introduced a co-operative housing programme in 2012 to support the development of a number of pilot schemes. It provides revenue funding to develop co-operative and community-led schemes through the Wales Co-operative Centre, and capital funding through its mainstream housing programme to develop affordable housing and low cost home ownership. The Confederation of Co-operative Housing has acted as an advisor to the Welsh Government and the Wales Co-operative Centre on developing the sector.   

In 2016 the Welsh Government pledged to build 20,000 affordable homes and made a Housing Pact with Community Housing Cymru and the Welsh Local Government Association to support housing development across all markets and geographies, including urban areas and through a continuation of funding for Rural Housing Enablers and support for co-operative housing. By March 2017, the project was working with housing associations, local authorities, rural housing enablers and communities on 19 schemes in 15 local authority areas. The community-led approaches have all been adapted to meet the needs of individual local authorities, housing associations and community stakeholders. 

The Wales Co-operative Centre was awarded three years revenue grant funding, totalling £1 million, in July 2019, to continue its support for the development of co-operative and community-led housing in Wales.


Last updated in March 2020