We need long-term, real solutions

The problem

It’s 2022 and street homelessness hasn’t ended. Decades of stagnant earnings, rising costs of living, in-work poverty and austerity have left many Scots struggling.

Among the many human impacts of this are mental and physical ill health, addiction, spiralling personal debt, family breakdowns and ultimately homelessness. For years, the amount that can be paid in Housing Benefit has flatlined, further narrowing the housing options available, particularly in areas such as Edinburgh where there is more money to be made from holiday lets. Councils have to rely on temporary accommodation such as B’n’Bs while they struggle to find homes for those on an ever-growing waiting list.

Charities on the edge

When the housing system fails and people fall apart, charities pick up the pieces. But charities are also victims of rising rental costs. Their innovation and financial security is threatened when they can’t find affordable, suitable properties in the areas where their help is needed the most. Many life-saving services operate on short-term funding with very tight margins. When commerical rentals rise, they become unsustainable, forcing many to close.

The solution

Common Ground Against Homelessness has been created to buy properties on behalf of charities, with specific expertise in their field, so they can continue their vital work sustainably.

More than just a solution for the financial challenges that charities face, Common Ground is also a solution to the problem of repeat homelessness. Charities know people and how to help them. Whether that is helping them recover from drug and alcohol dependence, escape domestic violence or countless other problems, front-line charities are innovators in creating environments that work for people and keep them off the streets. That innovation can only happen when the charity is able to do it’s work without needing to find ever-increasing amounts of money to pay rising rents.

Breaking Common Ground

By drawing on the power of Community Shares, we will bring together a community of ethical investors who understand that their money can do real good, while earning a market-leading rate of interest. The first project to be brought to life is Rowan Alba’s Peffermill residence.

A real, supportive community Rowan Alba’s work ends the cycle of repeat street homelessness

The vision

We have a vision of a series of properties across Scotland. Starting with our first investment, a property in Edinburgh which we are in active negotiation to secure.

We will purchase a four bed property using the funds from this share issue, then renovate it and lease it to Rowan Alba who will make it a home for life for 9 formerly homeless people. We will undertake the maintenance required and generally manage the property, which the charity will lease, and we receive rent like any other landlord. Using these rents, we will reinvest back into the property, into helping us buy further properties and to pay small returns to our investors, which are cheaper than we would otherwise have to pay for using debt finance, but represent much more than investors would be able to get for their savings.

Over the next 10 years we aim to raise £10,000,000 to allow us to partner with a range of charities who would otherwise not afford appropriate accommodation.

We think this is a win-win-win: charities get a secure property and can concentrate on how to support their clients, the clients have a secure home with the support they require, we get to build this more cheaply than by using traditional finance and investors get a better return than their savings are getting (and will be for the foreseeable future). Better still this is scalable and can grow and support more charities.

The finances

We believe that in addition to providing decent accommodation to homeless people, we can provide a reasonable return to investors as a thank you for allowing us to use their money to fulfill our mission.

That return isn’t going to make anyone their fortune, but it is better than what you would otherwise get for your savings at a bank or building society*, and yet still cheaper than it would cost us to secure those funds from banks ourselves.

We can offer a headline rate of up to 5% interest per year, but investors can choose to accept less if they would rather us reinvest more money into our core work. We will start paying interest at the end of the first year after investing, and people can make requests to withdraw funds after 3 years. Interest will be accrued and credited to your account, to be paid out to you whenever you withdraw your lump sum investment. Interest will not be compounded year-on-year.

* Unlike deposits with high street banks, Community Share are not covered by the Financial Services Compensation Scheme, nor is there any right of complaint to the Financial Ombudsman Service.

Our first Community Share offer is now closed

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Follow us on social media to keep up to date with developments at Peffermill.