The scandal of housing associations selling 99 year leases is revealed in Inside Housing today as buyers are hit with lease extension costs on top of huge fire safety bills and waking watch costs.
LKP has urged housing associations to sell all shared ownership leases at 999 years, or the legnth of their headlease where they might not own the freeholds.
Thousands of buyers are signed up to 99 year leases, however. Shared ownership is a questionable purchase at the best of times, with considerable complexity involved: you are both a short-term and long-term tenant (iw leaseholder), and disavantaged by both tenures.
Those affected by the building safety crisis say they feel like “cash cows” for housing associations
The trade magazine for the social housing sector gives the examples of Times Szabo, a shared owner at Royal Artillery Quays in Woolwich, south-east London, with 83 years on her lease from Optivo housing association.
It would cost £10-12,000 to extend, but service charges have risen from £270 a month to £450 a month to pay for waking watch, new fire doors, fire alarm system and higher insurance costs.
Ms Tzabo said: “My view of these really short leases they give is housing associations use shared owners as cash cows… they use us as a means of raising money presumably to turn back into the business to then build social housing. Building social housing is excellent… but how about people like me? Why are you not supporting shared owners? I am very financially vulnerable.”
Optivo said it “grants leases and operates lease extensions in line with the law”.
Tony James, chair of the residents’ association at High Point Village in Hayes, west London, owned by Metropolitan Thames Valley Housing suggests the housing association give the shared owners leases of the same length as its 125-year head lease (which will also have run down).
The shared ownership leases at High Point Village are 99 years.
Metropolitan Thames Valley Housing said its “industry-standard lease lengths” are made clear throughout the sales process and that it is “continuing to investigate how we can further improve our leasehold offer for customers”.
However, shared ownership leaseholders will still be made to pay for lease extensions.
L&Q was also repeating the line that it “aims to be fully transparent about leases at the point of sale”.
Stratford Eye development in east London is awaiting the results of a survey by L&Q to determine the scale of the fire safety issues.
Fabienne Jacquet’s flat was originally sold with a 99-year lease and she currently has 86 years left. Market sale buyers on the same scheme were granted 999-year leases by L&Q.