Kingsbridge information for leaseholders – June 2021
Several resident leaseholders on the estate have asked for more information on how the various potential options could affect them specifically. It is important to point out that all of the potential options are currently a ‘work in progress’ so it can be difficult to give conclusive answers at this stage. We also don’t yet know what the preferred regeneration option will be. As we work through the option appraisal process (which typically takes between 12 to 18 months) we will be able to provide more and more detail, and eventually settle upon a preferred option in consultation with the community. By that point leaseholders will have sufficient information to decide whether or not they support the proposal and vote accordingly in the resident ballot.
This document is designed to answer questions as best we can at this stage and to give you an overview of some general principles that would apply in the various options. If you think of a question that should be added, please let us know.
This is a ‘live’ document accurate as of June 2021.
1. If the preferred option involves refurbishment, what will I be expected to pay for?
Talking more generally, what works you can be expected to pay towards as part of a refurbishment is determined by your individual lease. Most leases allow the freeholder (in this case One Housing) to recover costs for works which involve repairs or maintenance (such as repairing the roof). In addition, some leases also allow the freeholder to recover costs for improvement works (such as adding balconies). Even leases that prohibit a freeholder recovering costs for improvements, may allow recovery of costs if the improvement is due to a law or regulation change (such as having to improve insultation due to environmental performance regulations).
In any instance, a Section 20 notice would be issued for costs we wished to recover as per normal procedure/the terms of your lease. Examples of improvements which have been shown in the options so far include the addition of lifts, balconies and improved insulation.
2. Why are you showing me options for regeneration if you don’t yet know what they will cost me?
3. Will my service charge go up because of any of the potential options?
4. If required for the preferred option, how will my property be valued?
5. If the preferred option involves the demolition of my home, will I receive any compensation?
6. Will my utility bills (electricity, gas, water etc) go up because of these options?
7. Will my council tax go up because of the regeneration?
8. If the preferred option involves partial or full redevelopment and my home is demolished, what options will be available to me?
Having said that, typically outright sale is offered to both non-resident and resident leaseholders, with resident leaseholders also having the option of taking an equity loan or shared ownership option. Some details on each of these options can be found below.
It should be noted that the text outlining the options below was taken from the landlord offer for One Housing’s proposed regeneration of Kedge House, Winch House & Starboard Way and may differ from the final offer made to the Kingsbridge leaseholders.
Outright sale – Available to both resident and non-resident leaseholders. One Housing will purchase your property for the full open market value as determined by an independent RICS qualified surveyor, plus a 10% statutory home loss payment for resident leaseholders and 7.5% home loss payment for non-resident leaseholders. We will also reimburse you for the reasonable cost of your own independent valuer, legal fees, stamp duty and financial advice relating to the sale and removal costs. Reimbursed costs are to be agreed before they are incurred through the provision of quotes. If you take this option, you would not be automatically entitled to a property within the new development. The buyback process must commence at least 18 months before the expected start on site date.
Gain full ownership of a new home within the development with an interest free loan arrangement with One Housing if required (an equity loan) – Available to resident leaseholders. You invest the full market value of your current home, plus your 10% home loss payment (less £6,500 that can be retained) into a new property within the upcoming development area.
You must invest the full value of your property, less any mandatory deductions from the agreed value (for service charge arrears or other personal debts for example) and any existing mortgage most be ported across. You will not pay any rent on the remaining equity.
One Housing will fund the difference in value and secure it against the value of the property (in effect an interest free loan). If the property is sold in the future One Housing would be entitled to receive the same proportion of sale revenue as they originally provided. The lease may be passed on once to an immediate family member as a succession. At the point of a second succession One Housing’s share of equity must be repaid through the sale of the property.
Gain partial ownership of a new home within the development with One Housing as partner (shared ownership) – Available to resident leaseholders. This option allows you to part own and part rent a newly built home within the new development. This option is for homeowners who wish to have the option to ‘buy out’ One Housing’s equity share over time. You will be asked to pay rent on the unpurchased portion of the property up to the lower of:
- 50 per cent of the value of the new property, or the full market value agreed for your existing property.
- You will be required to invest your full home loss payment, in order to get as close as possible to either of the two above thresholds (whichever is the lower).
- You are required to purchase a minimum of 25 per cent of the value of the new property.
- Rent will be charged at 2.75% on the difference between the share purchase price and the full market value or 50% of the value of the new property, whichever is lower.
- Any existing mortgage must be ported across to the new property. You can pay off a proportion (or all) of One Housing’s share at any time, subject to a market evaluation at that time. This is often referred to as ‘staircasing’.
9. Who is eligible to vote in a resident ballot for regeneration?
Eligible voters are as follows:
- Social tenants
- Resident leaseholders who have been living in their properties as their only or principal home for at least one year prior to the date the Landlord Offer is published and are named on the lease or freehold title for their property.
- Any resident whose principal home is on the estate and who has been on the local authority’s housing register for at least one year prior to the date the Landlord Offer is published.
Rob Lantsbury and Ifte Ahmed your Independent Resident Advisors specializes in leasehold matters. Please contact Rob or Ifte on the details below to discuss any matters independently.