All shared ownership homes built as part of London’s new Affordable Homes Programme (AHP) will be sold with 999-year leases as standard, the mayor of London Sadiq Khan has pledged.
The new expectation will apply to all shared ownership homes delivered through London’s new £4 billion AHP which will run from 2021-26.
City Hall has informed its housing partners of the decision as it aims to set a benchmark for higher standards for leaseholders and protect them from costly extension processes.
Last month ministers announced plans to give leaseholders the right to extend their leases to 990 years with zero ground rent.
However, City Hall believes that leaseholders will be better protected by adopting longer leases from the outset. Khan has called on the government to quickly introduce wider leasehold reform.
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.”
Leaseholders often face insecurity in the form of short leases, which depreciate the value of their property and force them to pursue stressful lease extension processes.
By convention leases tend to be offered for 99 or 125 years, although shorter leases can also be offered. City Hall’s 999-year stipulation for shared ownership homes as part of its AHP will therefore offer leaseholders greater security.
City Hall has asked developers to ensure that other homes they build in London, such as non-AHP shared ownership homes or private leasehold homes, are offered on similarly long leases where possible.
Sebastian O’Kelly, director of 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.”
This is just the latest action taken by Khan in support of London’s leaseholders. Earlier this month Khan proposed a one-off £3 billion levy on private developers to fund cladding replacement on unsafe high-rises.
A Ministry of Housing, Communities and Local Government spokesperson said: “Our latest figures show the number of new affordable homes built has increased for the fourth year in a row.
“We’re increasing the supply of affordable housing with over £12 billion funding, the largest investment in affordable housing in a decade, including 35,000 new affordable homes in London.”