Kingsbridge information for leaseholders – June 2021

During our engagement with residents so far, a number of questions have been asked that we felt would be useful to share with everyone on the estate. In April 2021, we published a ‘live’ FAQ document which will be updated and become more detailed as we progress through the options appraisal process.

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?
At this stage we don’t yet know what the full extent of any proposed refurbishment will be, or whether refurbishment will be a viable option. We are working with our consultant team to develop this information and expect to have a much better idea at the events which will be held in the coming months.

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?
We understand this can be frustrating, but in order to ‘price up’ an option we have to design it to a certain level. It is considered best practice to involve the local community, including leaseholders, in those design stages. That is why the early stages of an option appraisal (and we are still in the early stages as of June 2021) focus on design and on what residents think would be good ideas to consider to improve their block, before moving into financial assessment at a later date.
3. Will my service charge go up because of any of the potential options?
Probably. At this moment we can’t say by how much because we don’t know which option residents will choose. New services such as a lift, CCTV or a door entry system, whether in a refurbished block or in a new block, will likely lead to an increased charge. One Housing will keep any increases as low as possible and residents will be involved in deciding on what the option will be and what services will be provided. Having said that, any refurbished or new homes should be cheaper to run (i.e. your gas/electric/water bills should be less) and it is hoped that this will offset any increase in service charges. We will provide an estimate of service charge before the ballot on the preferred option.
4. If required for the preferred option, how will my property be valued?
If required for the preferred option, you can appoint an independent surveyor who is a member of the Royal Institute of Charted Surveys (RICS) to value your property. We would cover the cost of this valuation. The valuation would be determined on the basis that any proposed regeneration does not exist.
5. If the preferred option involves the demolition of my home, will I receive any compensation?
If you are a resident leaseholder who has been living in your property as your only or principal home for at least 12 months prior to the date the landlord offer is published, you will be entitled to a ‘Home Loss Payment’ of 10% of the value of your home as decided by the surveyor described in question 4. If you are a non-resident leaseholder, you will be entitled to a ‘Home Loss Payment’ of 7.5% of the value of your home. The percentage of compensation payable in this instance is set by law and is only applicable if your property is demolished as a result of the preferred option.
6. Will my utility bills (electricity, gas, water etc) go up because of these options?
Usually not, in most cases resident’s utility bills will decrease. This is because a refurbished or new building is (in most cases) much more energy efficient than an older one. We will aim to provide some estimated utility cost comparisons as part of the options appraisal.
7. Will my council tax go up because of the regeneration?
Probably. If the regeneration increases the value of your home, then this could lead to an increase in council tax. Any new buildings constructed as part of a regeneration option are likely to have a higher council tax than the current homes.
8. If the preferred option involves partial or full redevelopment and my home is demolished, what options will be available to me?
We are unable to provide a conclusive answer to this question because we have not yet started to develop the ‘Landlord Offer Document’ which will provide you with the details of our offer to residents prior to the ballot. The landlord offer is usually developed during the latter half of an options appraisal process, and this is because elements of it can be specific to the estate or to the specific preferred option.

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?
The eligibility requirement for voting is set by the Mayor of London’s office; The Greater London Authority and therefore we do not have discretion to set the voter eligibility criteria for resident ballots.

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. 07961 532761 – Hindi, Bengali, Sylheti speaker.