The Mayor of London, Sadiq Khan has outlined plans to increase the rights of leaseholders in the capital by setting out a new expectation that all shared ownership homes built as part of his
new Affordable Homes Programme (AHP) are sold with a 999-year lease as standard.
Sadiq is determined that London leads by example and sets the benchmark for higher standards for leaseholders across the UK.
The Mayor is committed to tackling London’s housing crisis and improving the standards of homes available to Londoners. As part of this, leaseholders, including those living in shared ownership properties, should be protected as far as possible from unreasonably costly and burdensome leasehold extension processes.
Earlier this month, ministers announced plans to streamline leaseholders’ ability to extend their leases to 990 years with zero ground rent. While the Mayor supports these measures, he believes that the objective of protecting leaseholders can also be achieved through the adoption of longer leases from the outset. The Mayor will continue to urge Government to act quickly in introduce wider leasehold reform.
Shorter leases have an impact on the value of the property. Properties tend to depreciate drastically when there are 80 or fewer years left on the lease. With shorter leases, the point at which this happens is reached sooner, forcing leaseholders to start a lease extension process to secure the value of the property.
The new expectation, set out in a letter to City Hall housing partners by Deputy Mayor for Housing Tom Copley, will apply to all shared ownership homes delivered through Sadiq’s new £4bn Affordable Homes Programme which will run from 2021-26. The Mayor has hit every single one of the delivery targets in the current Homes for Londoners: Affordable Homes Programme 2016-2023.
In the letter, the Deputy Mayor also strongly encourages developers to ensure that other homes they build, such as shared ownership homes not in receipt of AHP funding, or private leasehold homes, are offered on a similar long-lease basis where it is possible to do so.
The Mayor of London, Sadiq Khan, said: “Shared ownership properties can be a helpful first rung on the housing ladder for Londoners. However, too many leaseholders continue to face unfair extra costs that increase stress for themselves and their families.
“Shared owners deserve to feel secure in their home for as long as they live there without the threat of an unreasonably costly and burdensome leasehold extension process hanging over them.
“I’m proud of my record on new genuinely affordable homes, including the action we’ve taken to start building more new council homes last year than in any year since 1983. It’s long past time the Government enacted leasehold reform, and I’m determined to lead by example by doing everything I can within my powers to help leaseholders and improve shared ownership.”
Sebastian O'Kelly, Director, Leasehold Knowledge Partnership: “We applaud the London mayor for urging that all shared-ownership leases should be for 999 years.
“The point of shared ownership is to give the least well-off a chance to get on the housing ladder. It is mortifying to come across cases where
shared owners have taken years to staircase up to 100% ownership and then get kicked in the teeth because the lease needs extending, at the cost of another £20-30,000.
“Wherever possible, all shared ownership leases should be 999 years or no shorter than the headlease owned by the social landlord issuing these subleases.”
Photo by DAVID HOLT, Wikimedia commons.