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Houses At Cost

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In Argentina (and probably most places with a Spanish legal system) they have a legal arrangement called "Fedicomiso al costo". This is a trust agreement that allows a group of people to construct their own homes (normally apartments) at cost.

The beauty of the arrangement is people have confidence in it becuase its legally watertight (ie non performing fiduciaries can easily be replaced, divorce/death/bankrupcy of individual parties doesn't derail it). Furthermore, no one makes a "profit" (the architect, builder, lawyer, adminstrator get paid their fees). Normally the landowner receives apartments in return for the land (thus little money is needed to get the scheme up and running)

Its a very common way to buy and it typically allows you to buy at about 35% less than that which it would otherwise be sold for.

I thought i'd put this out there to see what people think about how other countries get over the "affordabilty/ lack of finance" problem.

PS i hope moderator doesn't put this in "overseas prop" as its intended to be read in the context of the UK market.

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In Spain they have "corporativos" which I guess are like "mutuals" in UK parlance where you can become a partner (socio) in a development. Normally there is a group running the corporativo that buys the land, gets the planning permission, builds the building and in theory takes no profit (no doubt they'll take a few of the choice penthouse apartments instead).

Once you have bought into a corporativo you have a say in how it is built and how much is spent. This can be risky because they might vote for high quality finishings and the cost may go up, or they might vote the other way and you end up with a place that is below your expectations. If there are major changes that you don't like (e.g. they end up with a different plot of land) then you can usually leave pretty easily, and get your money back.

They are notoriously bureaucratic and can take many years to complete, and there have been scare stories of people running off with the money.

Some corporativos are run on the behalf of certain workers - e.g. near a new hospital you might find a corporativo development for housing nurses. Some corporativos are for social housing, so they are only open to people on low incomes, but the corporativo will get a government subsidy. I read that these these have come in for criticism in Spain because they place an artificial floor on the market, but I can't remember the details.

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In Spain they have "corporativos" which I guess are like "mutuals" in UK parlance where you can become a partner (socio) in a development. Normally there is a group running the corporativo that buys the land, gets the planning permission, builds the building and in theory takes no profit (no doubt they'll take a few of the choice penthouse apartments instead).

Once you have bought into a corporativo you have a say in how it is built and how much is spent. This can be risky because they might vote for high quality finishings and the cost may go up, or they might vote the other way and you end up with a place that is below your expectations. If there are major changes that you don't like (e.g. they end up with a different plot of land) then you can usually leave pretty easily, and get your money back.

They are notoriously bureaucratic and can take many years to complete, and there have been scare stories of people running off with the money.

Some corporativos are run on the behalf of certain workers - e.g. near a new hospital you might find a corporativo development for housing nurses. Some corporativos are for social housing, so they are only open to people on low incomes, but the corporativo will get a government subsidy. I read that these these have come in for criticism in Spain because they place an artificial floor on the market, but I can't remember the details.

In Argentina (where trust is at a premium) the system works well. The buyers don't have any design input and to all intents and purposes the buying/ construction process is the same. It just has an administrator (often a specialist lawyer earning a fee running the show instead of a developer on a profit margin). i guess its nominally more bureaucratic. Often a Fedicomiso will build several buildings one after the other, so buyers can check out their record on quality, program etc.

I don't know about the legal issues here in the UK, but that aside i don't see why it couldn't be done here. One obstacle is the availabilty of land of course. In Argentina its easier to find people with the suitable land, but without the resources to develop it.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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