There is such a thing as loanstock. Many fully mutual housing co–ops raise part of their capital by offering out loanstock to investors, a low interest investment secured against the value of the house. It is a bricks and mortar very safe investment. Money borrowed from a bank as a mortgage costs in the region of 5%, higher than domestic mortgage, but as co-op we pay a commercial rate plus, we are customers of Triodos bank, an ethical bank with high standards but consequently not the very cheapest to borrow from. We have been offering 4% on loanstock, and indeed we have some we need to replace currently and with interest rates at historic lows its a sound bet.
I trained as a teacher, completing a PGCE in Economic and Business Studies, and later taught for 4 terms in Reading before I moved to Wales, so i kind of the subject in my blood stream. I really enjoy the Uneducated Economist on YouTube for his wry and insightful observations on economic themes. In this episode we speculates about the likelihood of negative interest rates. This chimed deeply with me, its some thing max Keiser talks about on is RT progam Keiser Report. Of course you have to get rid of cash to make negative interest rates happen effectively and it seems almost certain that we are goign to begin to experience that soon, especially as Uneducated Economist speculates when we move to UBI stimuli to try and restart the collapsing world economy.
Investing in social infrastructure such as affordable, ecologically responsible housing makes a a lot of sense. One Planet Development ideas here in Wales are also really opening up the possibility for whole new ways of living. More collaborative, with a localised lifestyple and much more closely connected to the land.
I might suggest that it is a time to think about investing in co-ops – those who have funds to invest, many don’t of course, but maybe they might have initiative and drive to offer instead. This kind of mutual could unlock and whole raft of possibilities.