Mutual Home Ownership

Mutual Home Ownership (MHO) is a new form of home ownership that seeks to increase the supply of affordable market housing. Unlike other forms of low cost home ownership, it is designed so that homes remain permanently affordable and not move out into the open market.

MHO creates a new way of owning residential property – it is a form of tenure in which residents collectively own a cooperative society called a Mutual Home Ownership Cooperative Society (MHOS).

To do this people who move into the properties will form a MHOS and, through a MHO model, will accrue equity in their homes by buying shares in the MHOS. This means a member won’t own the house they live in but will be a shareholder member and will own the MHOS that does.

Residents pay for the development costs of the homes with a member deposit and monthly  payments under the terms of a long lease. When a resident leaves they assign their lease & occupancy rights to a new incoming member. The outgoing member then sells their shares back to the MHOS and incoming members then buy these shares.

This trading of equity shares ensures that the benefit of the land is held outside the market by the MHOS and the affordability it creates is recycled from one generation of occupant members to the next.

These arrangements create a new way of owning equity in the value of residential property.