Sadiq Khan leads the way with long leases for London’s tenants looking to get on the shared ownership property ladder.
Affordable Housing Programme
The Mayor of London, Sadiq Khan, has outlined plans to sell shared ownership homes delivered as part of his new Affordable Housing Programme with long leases for London’s tenants on a standard 999-year lease term.
Sadiq is determined that London leads by example and sets the benchmark for higher standards for leaseholders across the UK. The new expectation, which was set out in a letter written by Deputy Mayor for Housing Tom Copley, will apply to all shared ownership homes built through the Affordable Housing Programme.
In addition, the letter states “that all other housing developers should offer homes on a similar long-lease basis where it is possible to do so.”
Tackling London’s housing crisis
Long leases for London’s tenants is part of the Mayor’s commitment to tackling the housing crisis and improving the standards of homes available to Londoners. One part of this is the protection of tenants from the ever-increasing costs and difficulty of getting a lease extension. The value of leasehold properties can decrease when there are 80 years or less remaining on the term of the lease. Indeed, some lenders will not even let you borrow money for a purchase of a leasehold property that has less than 60-70 years left!
Our previous blog about the upcoming leasehold reforms announced by ministers recently aims to streamline leaseholders’ ability to extend their leases to 990 years with zero ground rent.
Concerns over an increase costs to purchase leaseholds
The Mayor supports these measures but wants to go one step further by the introduction of long leases from the very outset and removing the need for lease extensions later. However, Tony Chauhan, Property Partner at Bowling & Co Solicitors in London believes this may encourage developers to increase the cost of purchasing the leasehold property to compensate.
The Mayor will continue to urge the Government to act quickly in introducing wider leasehold reform.
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.”
Read more about the London Mayor’s 999-year lease pledge and his plans to deliver long leases for London’s tenants.
This is not legal advice; it is intended to provide information of general interest about current legal issues.