We have tried for more than a year to find a house to rent. It won’t surprise anyone in Blewbury to hear that this has been very difficult. Plus the rent would go to a private landlord, rather than being used to support Blewbury ReST and its longer-term vision for a new almshouse. We think we can work towards this if there are enough people to support us.

We believe that most people will choose to invest because of the various community benefits. However, we do aim to offer a level of protection: the investment would be backed by a property in Blewbury; this can be sold if needs be. Of course, no investment is risk free and it is possible you could get back less than you invested in certain circumstances.    

Why a loan?

A loan can be a good way of investing money and receiving a financial return, while enabling the money to be used for a social purpose. It is an increasingly common way for social enterprises to be funded, and there are a lot of existing examples of loans being used to buy houses for social purposes. For these schemes, a loan can provide a number of advantages over shares, as further explained below.

How much is the interest rate?

We are offering a choice of interest rates: 1%, 2% or 3%. It’s entirely up to you. The lower the interest rate, the more effectively we can manage the home.

How will we pay the interest?

Tenants will pay rent to provide a financial return to lenders, which will be paid every 6 months in arrears.

Is there a minimum loan?

Yes, a loan of £5,000. You can of course lend more. However, if you choose to donate, there is no minimum!

How long is the loan for?

The initial period of the loan is for 5 years. See below for what happens after 5 years.

When do I transfer the money?

We are asking people to make a pledge now, so that we know we can buy the right house when it comes on the market. When this happens we will contact you and ask for the money to be transferred to the charity’s bank account so that we are ready to pay the deposit.

Why ask for investment rather than donations?

It is true that donations are very attractive, and can be increased by gift aid. We have raised more than £25,000 in donations since the start of 2022, and continue to fundraise. But while we could afford to rent a house if a suitable one was available, this sum wouldn’t enable us to purchase a new almshouse, and can’t provide a long-term solution.

Why a loan and not shares in a company?

Charities are not allowed to issue shares. Shares are often more complicated than loans: they involve individual ownership, whereas loans are more suited to community schemes run by charities for the public benefit. We are using a model that has been tested by a number of other charities.

How will we manage the home?

Blewbury ReST will arrange for buildings insurance. We will learn from United Charities, who have experience in the maintenance and management of the two existing almshouses, and use a similar model for this new home. Fortunately, there is a lot of knowledge about managing almshouses in Blewbury: our core group includes trustees of both the United Charities and the Malthus Trust, a charity which owns and maintains the Pre-school building.

What are the income tax liabilities of the loan?

The interest paid is classed as income, therefore it is subject to income tax at the prevailing rate, if you are liable to tax. If you make your loan interest free, then no tax is payable. It is your responsibility to comply with your tax obligations.

What happens at the end of the 5 year period? How are loans repaid?

Between six months to one year before your loan term ends, we will ask you whether you would like to renew your loan or have the loan repaid. This gives us time to plan accordingly. If you would like your loan to be repaid, the Blewbury ReST charity would seek to do this from a combination of capital accrued and new lending. If many lenders wish for their loans to be repaid at the same time, and if it’s not possible to find enough new lenders, the charity would look to sell the home in order to pay back lenders.

What is the guarantee I will get my money back?

Blewbury ReST aims to repay you the full amount of your loan value at the repayment date. However, with an unsecured loan we are unable to offer any guarantee regarding full repayment. We therefore encourage you to consider the loan carefully. We will work hard to manage the various risks involved.

What if house prices fall?

The main risk is that property prices fall dramatically. If this happens, it is possible that at the end of the loan period there might not be sufficient to re-pay every lender in full. If we do have to sell the house, and there is a shortfall due to the fall in value and the costs of sale, then to be fair to everyone, the loan would be repaid in proportion to the net amount available. For example, if the net amount available after the sale was 95% of the total due to all the lenders, then the amount individual lenders receive back would be reduced accordingly, pro rata. Of course, Blewbury is an attractive place to live and we hope that prices would not fall so far as to make this necessary.

What if house prices rise?

This is a loan, not a property investment. If house prices rise, then the charity would get the benefit, rather than the extra value being paid to the lenders.

What if the house is damaged, or there is a long period of vacancy?

We hope this will not arise. However, we have done financial modelling which provides contingency for a short annual gap between tenancies, and for one unexpected major gap due to a significant repair being needed.

Can organisations make a loan?

Yes, we can accept loans from organisations.

What happens in the event of my death?

The loan will still be valid for the loan period, unless we can find another lender to stand in. At the end of the loan period, we will aim to repay the loan to your executors within three months of receiving a copy of your death certificate, unless you have made provision in your will for it to be forgiven on your death or your executors agree to forgive the loan. If the loan is forgiven, it would become a gift to the charity, and may be exempt for inheritance tax purposes.

We have consulted with a similar charity, Homes with Purpose, who own and manage four houses in Oxford. Around 20% of their lenders offer to forgive the loan in the event of their passing.

If we have additional lenders willing to lend to the charity, we will attempt to substitute lenders so that any lender who has made a loan, but dies before the end of the loan term, can have the money repaid to their executors. However, we cannot guarantee we will be able to make this early repayment.

What if the charity borrows the money to buy a house and the house purchase falls through?

In the event that we have borrowed the money and are unable to proceed with the purchase, we will repay the money. If this happens within six weeks of your loan amount being received, then we reserve the right not to pay interest for that six-week period. 

What are the terms and conditions?

Before anyone lends any money, they will be provided with detailed terms and conditions. For now, you can refer to the terms and conditions from Homes with Purpose, which will form the basis of our terms and conditions, albeit with some modifications.

Can I transfer my loan to another person, e.g. a family member?

Yes, you may transfer your loan to another person, subject to the same terms and conditions. We cannot advise you in relation to the tax on transfers.

Can I gift my loan to the charity?

Yes, and we would be delighted if people do this at the end of their loan term as it would enable us to retain, or expand, the scheme in the future. Gift aid may also be possible at the relevant timoes here

A loan can be a good way of investing money and receiving a financial return, while enabling the money to be used for a social purpose. It is an increasingly common way for social enterprises to be funded, and there are a lot of existing examples of loans being used to buy houses for social purposes. For these schemes, a loan can provide a number of advantages over shares, as further explained below.

We are offering a choice of interest rates: 1%, 2% or 3%. It’s entirely up to you. The lower the interest rate, the more effectively we can manage the home.

Tenants will pay rent to provide a financial return to lenders, which will be paid every 6 months in arrears.

Yes, a loan of £5,000. You can of course lend more. However, if you choose to donate, there is no minimum!

The initial period of the loan is for 5 years. See below for what happens after 5 years.

We are asking people to make a pledge now, so that we know we can buy the right house when it comes on the market. When this happens we will contact you and ask for the money to be transferred to the charity’s bank account so that we are ready to pay the deposit.

It is true that donations are very attractive, and can be increased by gift aid. We have raised more than £25,000 in donations since the start of 2022, and continue to fundraise. But while we could afford to rent a house if a suitable one was available, this sum wouldn’t enable us to purchase a new almshouse, and can’t provide a long-term solution.

Charities are not allowed to issue shares. Shares are often more complicated than loans: they involve individual ownership, whereas loans are more suited to community schemes run by charities for the public benefit. We are using a model that has been tested by a number of other charities.

Blewbury ReST will arrange for buildings insurance. We will learn from United Charities, who have experience in the maintenance and management of the two existing almshouses, and use a similar model for this new home. Fortunately, there is a lot of knowledge about managing almshouses in Blewbury: our core group includes trustees of both the United Charities and the Malthus Trust, a charity which owns and maintains the Pre-school building.

The interest paid is classed as income, therefore it is subject to income tax at the prevailing rate, if you are liable to tax. If you make your loan interest free, then no tax is payable. It is your responsibility to comply with your tax obligations.

What happens at the end of the 5 year period? How are loans repaid?

Between six months to one year before your loan term ends, we will ask you whether you would like to renew your loan or have the loan repaid. This gives us time to plan accordingly. If you would like your loan to be repaid, the Blewbury ReST charity would seek to do this from a combination of capital accrued and new lending. If many lenders wish for their loans to be repaid at the same time, and if it’s not possible to find enough new lenders, the charity would look to sell the home in order to pay back lenders.

What is the guarantee I will get my money back?

Blewbury ReST aims to repay you the full amount of your loan value at the repayment date. However, with an unsecured loan we are unable to offer any guarantee regarding full repayment. We therefore encourage you to consider the loan carefully. We will work hard to manage the various risks involved.

What if house prices fall?

The main risk is that property prices fall dramatically. If this happens, it is possible that at the end of the loan period there might not be sufficient to re-pay every lender in full. If we do have to sell the house, and there is a shortfall due to the fall in value and the costs of sale, then to be fair to everyone, the loan would be repaid in proportion to the net amount available. For example, if the net amount available after the sale was 95% of the total due to all the lenders, then the amount individual lenders receive back would be reduced accordingly, pro rata. Of course, Blewbury is an attractive place to live and we hope that prices would not fall so far as to make this necessary.

What if house prices rise?

This is a loan, not a property investment. If house prices rise, then the charity would get the benefit, rather than the extra value being paid to the lenders.

What if the house is damaged, or there is a long period of vacancy?

We hope this will not arise. However, we have done financial modelling which provides contingency for a short annual gap between tenancies, and for one unexpected major gap due to a significant repair being needed.

Can organisations make a loan?

Yes, we can accept loans from organisations.

What happens in the event of my death?

The loan will still be valid for the loan period, unless we can find another lender to stand in. At the end of the loan period, we will aim to repay the loan to your executors within three months of receiving a copy of your death certificate, unless you have made provision in your will for it to be forgiven on your death or your executors agree to forgive the loan. If the loan is forgiven, it would become a gift to the charity, and may be exempt for inheritance tax purposes.

We have consulted with a similar charity, Homes with Purpose, who own and manage four houses in Oxford. Around 20% of their lenders offer to forgive the loan in the event of their passing.

If we have additional lenders willing to lend to the charity, we will attempt to substitute lenders so that any lender who has made a loan, but dies before the end of the loan term, can have the money repaid to their executors. However, we cannot guarantee we will be able to make this early repayment.

What if the charity borrows the money to buy a house and the house purchase falls through?

In the event that we have borrowed the money and are unable to proceed with the purchase, we will repay the money. If this happens within six weeks of your loan amount being received, then we reserve the right not to pay interest for that six-week period. 

What are the terms and conditions?

Before anyone lends any money, they will be provided with detailed terms and conditions. For now, you can refer to the terms and conditions from Homes with Purpose, which will form the basis of our terms and conditions, albeit with some modifications.

Can I transfer my loan to another person, e.g. a family member?

Yes, you may transfer your loan to another person, subject to the same terms and conditions. We cannot advise you in relation to the tax on transfers.

Can I gift my loan to the charity?

Yes, and we would be delighted if people do this at the end of their loan term as it would enable us to retain, or expand, the scheme in the future. Gift aid may also be possible at the relevant timoes here

Between six months to one year before your loan term ends, we will ask you whether you would like to renew your loan or have the loan repaid. This gives us time to plan accordingly. If you would like your loan to be repaid, the Blewbury ReST charity would seek to do this from a combination of capital accrued and new lending. If many lenders wish for their loans to be repaid at the same time, and if it’s not possible to find enough new lenders, the charity would look to sell the home in order to pay back lenders.

Blewbury ReST aims to repay you the full amount of your loan value at the repayment date.

However, with an unsecured loan we are unable to offer any guarantee regarding full repayment.

We therefore encourage you to consider the loan carefully. We will work hard to manage the various risks involved.

The main risk is that property prices fall dramatically. If this happens, it is possible that at the end of the loan period there might not be sufficient to re-pay every lender in full.

If we do have to sell the house, and there is a shortfall due to the fall in value and the costs of sale, then to be fair to everyone, the loan would be repaid in proportion to the net amount available.

For example, if the net amount available after the sale was 95% of the total due to all the lenders, then the amount individual lenders receive back would be reduced accordingly, pro rata.

Of course, Blewbury is an attractive place to live and we hope that prices would not fall so far as to make this necessary.

This is a loan, not a property investment. If house prices rise, then the charity would get the benefit, rather than the extra value being paid to the lenders.

We hope this will not arise. However, we have done financial modelling which provides contingency for a short annual gap between tenancies, and for one unexpected major gap due to a significant repair being needed.

Yes, we can accept loans from organisations.

The loan will still be valid for the loan period, unless we can find another lender to stand in.

At the end of the loan period, we will aim to repay the loan to your executors within three months of receiving a copy of your death certificate, unless you have made provision in your will for it to be forgiven on your death or your executors agree to forgive the loan. If the loan is forgiven, it would become a gift to the charity, and may be exempt for inheritance tax purposes.

We have consulted with a similar charity, Homes with Purpose, who own and manage four houses in Oxford. Around 20% of their lenders offer to forgive the loan in the event of their passing.

If we have additional lenders willing to lend to the charity, we will attempt to substitute lenders so that any lender who has made a loan, but dies before the end of the loan term, can have the money repaid to their executors. However, we cannot guarantee we will be able to make this early repayment.

In the event that we have borrowed the money and are unable to proceed with the purchase, we will repay the money. If this happens within six weeks of your loan amount being received, then we reserve the right not to pay interest for that six-week period. 

Yes, you may transfer your loan to another person, subject to the same terms and conditions. We cannot advise you in relation to the tax on transfers.

Yes, and we would be delighted if people do this at the end of their loan term as it would enable us to retain, or expand, the scheme in the future. Gift aid may also be possible at the relevant times here.

Before anyone lends any money, they will be provided with detailed terms and conditions. For now, you can refer to the terms and conditions from Homes with Purpose, which will form the basis of our terms and conditions, albeit with some modifications.

Andy Jarvis; Joss Saunders; Sheila Loy; Suzanne Smith; Helen and Dermot Mathias; Liz Cooper; Anne Millman; Zillah Richards; Kristy Siegfried; Lydia Inglis; Cath Watsham; Salli Baker.