By Owen Jarvis, UK Cohousing Network, in partnership with TOWN and Ecology Building Society

Across the UK, a growing pipeline of cohousing buyers is actively seeking mortgage finance — with limited availability of suitable products from mainstream lenders.

More than 65 groups are currently progressing towards development, with hundreds more expected in the coming years. Many of these groups will require mortgage finance within the next 12–36 months, representing a steady flow of demand for high-quality homes — typically flats, terraces and family housing with shared green space and community facilities.

For building societies, this is not a speculative niche. It is an emerging market segment with clear alignment to mutual values, sustainability goals and long-term community investment — and a tangible opportunity to engage early and shape lending approaches. 

What is Cohousing? 

Cohousing developments combine private homes with shared spaces such as gardens, workshops and a common house. They are typically co-designed by future residents  and collectively managed once built.

The model is well established in Northern Europe and the US. In the UK, the first modern scheme opened in 2003, with over 330 homes now delivered and a growing development pipeline. Two schemes won prestigious national Housing Design Awards last year.

Cohousing also aligns with several long-term policy and market trends:

• healthy ageing and reduced isolation
• demand for more sociable neighbourhoods
• low-impact, land-efficient development
• nature-positive urban design

A Real and Emerging Lending Pipeline

Crucially, this is not just a development pipeline — it is a pipeline of prospective mortgage applicants.
UK Cohousing Network is already working with groups where:

• individuals are financially prepared and actively planning purchases
• schemes are progressing through site acquisition and planning
• demand for mortgage products is forming ahead of delivery

For lenders, this creates an opportunity to:

• build early relationships with future borrowers
• pilot lending approaches in a controlled way
• shape underwriting standards alongside real projects

Early engagement offers the chance to establish a leading position in a growing and currently underserved segment.

Case Study: Marmalade Lane — From Perceived Risk to Mortgageable Model

Marmalade Lane in Cambridge (42 homes, completed 2018) is the UK’s first site-first, developer-enabled cohousing scheme.

Initial challenges for lenders included:

• lack of comparable sales due to off-market transactions
• uncertainty around resale processes
• title restrictions designed to preserve community integrity

These issues were addressed through relatively modest adjustments:

• introduction of a hybrid sales model (community-first, then open market)
• improved availability of comparable sales data
• refinement of title restrictions (including an 8-week community “first look” period)

What this shows for lenders:

• valuation risk can be reduced through transparent resale mechanisms
• legal structures can evolve without undermining the model
• cohousing can integrate with mainstream lending frameworks

Mortgage availability proved critical not only for affordability, but for the long-term viability of the community.

Case Study: Ecology Building Society — A Working Lending Model

Ecology Building Society has played a leading role in lending to cohousing and community-led housing.

Their approach includes:

• lending up to 90% loan-to-value on community-led homes
• flexibility around construction types (including off-site build)
• integration of energy performance incentives
• tailored products for individuals, co-operatives and community organisations

Key takeaway for lenders:

This is not about creating entirely new products. It is about adapting existing lending approaches — particularly around valuation, title conditions and construction types — to reflect the realities of community-led development.

Ecology’s experience demonstrates that this market can be both commercially viable and aligned with sustainability and mutual objectives.

Why This Matters for Building Societies

Market opportunity
A live and growing pipeline of borrowers seeking mortgage finance.

Strategic alignment
Supports mutual principles, long-term stewardship and community investment.

Environmental positioning
Cohousing developments typically embed energy efficiency, shared resources and green space.

Product innovation
An opportunity to differentiate lending offers in a credible, values-driven way.

Next Steps: Invitation to Engage

UK Cohousing Network, TOWN and Ecology Building Society are convening a small roundtable of interested lenders to:

• explore access to a live pipeline of prospective mortgage applicants
• identify practical barriers to lending in cohousing schemes
• co-develop workable product approaches and underwriting criteria

This is a practical opportunity to engage early, test approaches, and shape how lending evolves in this space.

Contact: Owen Jarvis www.cohousing.org.uk