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Types of housing co-operative

This content applies to England

There are a number of different types of housing co-operative.

The type of co-operative affects the rights of the occupiers and how the housing co-operative works.

Types of housing co-operatives at a glance

The types of housing co-operative are:

  • fully mutual associations (most of which are called co-operative housing associations) which fall into two types:[1]
    • par value co-operatives
    • co-ownership housing associations
  • short-life housing co-operatives (subject to the same rules as fully mutual associations)
  • tenant management organisations and management co-operatives
  • self-build housing co-operatives
  • privately funded housing co-operatives.

For information about the rights of occupiers of the different types of housing co-operatives see the Housing co-operative occupiers page.

Fully mutual associations

Most housing co-operatives are fully mutual associations. If they are registered under the Industrial and Provident Societies Act 1965, they are legally called 'co-operative housing associations'. If so registered, the housing co-operative has an independent legal status separate from its members. All tenants of the housing co-operative are members of it. Membership can also include prospective tenants.[2] There are two types of fully mutual association: 'par value co-operatives' and 'co-ownership housing associations'.

Par value co-operatives

Par value co-operatives may also be called 'ownership co-operatives'. They also used to be called 'HAG-funded co-operatives' (the Housing Association Grant (HAG) used to a form of funding). Par value co-operatives are the most common type of housing co-operative.

Par value co-operatives require equality between members in regard to decision-making and financial interest. Par value status means that no member of the housing co-operative has a financial interest in the housing co-operative other than the face value of the individual share holding, which is normally a nominal sum such as £1. This means that individual members of the housing co-operative cannot be held responsible for the housing co-operative's finances. This arrangement is often called 'limited liability by guarantee'.

Co-ownership housing associations

Co-ownership housing associations are also called co-ownership societies. Each tenant has an equitable stake in the housing association, calculated on the basis of the value of the property in which s/he lives. Co-ownership housing associations are less common nowadays.

Short-life housing co-operatives

There is no specific legal regime for short-life housing co-operatives, which are subject to the normal rules relating to other fully mutual co-operatives. Short-life housing co-operatives are usually registered with the Financial Services Authority (FSA) and the regulator of social housing because of the advantages which registration confers.

The main distinction between short-life housing co-operatives and other fully mutual co-operatives is the purpose for which they are set up. A short-life housing co-operative has property that has been borrowed from the owner to provide short-term accommodation for groups of people. Property owners, such as local authorities or private registered providers of social housing (PRPSHs), formerly known as registered social landlords (RSLs), often allow property to be used on a short-life basis when they are unable to repair it, or cannot develop the area at that time due to financial constraints. Usually the owner will grant a group of people, sometimes called a Short-Life User Group (SLUG), a licence to occupy property for a specific period of time, normally between one and five years. The owner is guaranteed vacant possession at the end of the agreed time. Although there is a great deal of variety, most short-life housing is in a poor state of repair.

The number of short-life housing co-operatives is diminishing because local authorities and PRPSHs are making less property available for short-life housing.

Tenant management organisations and management co-operatives

Since April 1994 tenants of local authorities have been able to take over the management of the local authority's properties by the establishment of a tenant management organisation (TMO).[3] Prior to this date this could be done through the establishment of a management co-operative. PRPSH tenants may also take on housing management responsibilities by forming a management co-operative to manage their homes.

The tenant management organisation/management co-operative becomes the managing agent for the landlord and, depending on what is included in the management agreement between the tenant management organisation/management co-operative and the landlord, may be responsible for a variety of management duties for the properties that the members occupy, for example ensuring that repairs are carried out. A TMO is an organisation which satisfies the following legal conditions:[4]

  • it has a written constitution, which must:
    • specify the area in which it wishes to enter into a TMO agreement with the local authority
    • provide that any tenant of a house in that area may become a member of the TMO
    • provide that the TMO will avoid unlawful discrimination when conducting its affairs
    • provide that the affairs of the TMO must be conducted by either the members of the TMO at a general meeting, or by a committee or board of directors who have been elected by members of the TMO.

Self-build housing co-operatives

A self-build housing co-operative is a housing association where the members build or improve the properties which they are to live in.[5] The homes are likely to cost less to build than the market value of the property, and are likely to be built to a high standard. There is no requirement for self-build co-operatives to be registered.

Privately funded housing co-operatives

Some housing co-operatives are set up with private funds. Most of these housing co-operatives only have a small number of houses.


The information on this page applies only to England. Go to Shelter Cymru for information relating to Wales.

[1] s.1(2) Housing Associations Act 1985.

[2] s.1(2) Housing Associations Act 1985.

[3] s.27AB Housing Act 1985.

[4] reg 4 Housing (Right to Manage) (England) Regulations 2012 SI 2012/1821.

[5] s.1(3) Housing Associations Act 1985.

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