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Who wouldn’t want to be a leaseholder, rather than simply a tenant?

Posted on 28th July 2015

Of course this makes sense. Being a leaseholder would of course provide more security, right? For example, the Right to Buy Scheme boasts to bring about such security for leaseholders. Through this Scheme, George Osborne states that several individuals are better off being leaseholders than tenants as they would have more security. Is this actually the case?

Newly elected Mhairi Black told the Commons in her maiden speech that Mr Osborne would argue that it is beneficial for individuals to become leaseholders, it will provide them a ‘personal achievement and aspiration’. It was further stated that ‘aspiration is the bedrock of the right-to-buy policy: tenants who “aspire” can become homeowners, building a future for their children and family’.

On that basis, who would not want to become a leaseholder? This would make sense, for example if we look at the new benefit caps and issues surrounding the same, you would of course want more security. Those who were renting and subject to housing benefit caps were at a serious loss. The guardian reported that benefit cuts specifically bedroom tax resulted in record levels of evictions in 2014. They quoted that an average of 100 evictions took place a day and more than £30,000 people were evicted from their homes. Ministry of Justice figures showed 11,100 rented properties were repossessed by bailiffs between July and September 2014 and this was the highest quarterly figure since records began in 2000. In December 2014, Shelter stated that an estimated 1300 people were put at risk from eviction or repossession which is approximately 560 households.

Therefore, it would seem that the safest option would be to become a leaseholder?

Unfortunately, leaseholders in the London Borough of Lambeth came to learn that there was no security in being a leaseholder. In fact, there would be more security in being a tenant.

Lambeth Council recently decided to demolish 306 homes, on the Cressingham Gardens Estate, after they charge each leaseholder approximately £14,000.00 to make repairs to a structurally sound building. Even though leaseholders have confirmed that the properties have no issues with leaks and their properties are structurally sound, the Council have decided that these works must be completed and leaseholders must pay towards the costs. Leaseholders may be liable for these costs as they are bound by the terms of their lease.

The Council is insisting that the option to demolish the properties is the most cost-effective route, despite the £99,700,039 finance cost that the Council will have to pay for full demolition and a further £1.4million to complete the repairs.

The Council intend to demolish the existing homes and build luxury apartments. This regeneration will allow an extra 158 more homes. The Council asserts that in so doing they will be providing more homes for 20,000 people currently on the Council house waiting list for Social Housing. Thus a bonus for social housing tenants, but where does that leave the leaseholders?

Many residents of the estate are now protesting against this unfair decision stating there is “no good reason” for their homes to be demolished. They have, also, stated that it is ‘scandalous’ to seek monies up to £14,000.00 and then demolish their homes.

Even though Mr Osborne states that leaseholders have more security, the Council have stated that social tenants, hence those who rent, will be guaranteed a home on the regenerated estate, however, it is likely that the leaseholder’s will be out of luck! It is unlikely that the compensation leaseholders receive from the Council will be enough to assist them to buy one of the new flats that replace their currently affordable homes. Newer buildings can only mean higher rent and service charges in order for the Council to be able to maintain these properties will make it even more unaffordable. Therefore, leaseholders will not be in a position to buy a luxury flat instead they will have to consider shared ownership, a move from the area or to become a tenant again, yes a tenant! So again, where is the security?

This only leads to a loss of faith in George Osbourne’s Right to Buy Scheme. This is the fate that many leaseholders who have aspired to be home owners have to face. Even as home owners they may be left without any security. As a result, many long-standing residents will be forced out of their community. Consequently, Lambeth Council will be breaking apart a beautiful vibrant community, where people have been living together in peace and harmony for years and have built strong friendships as well as community ties.

Therefore, it seems that may not be able to find security as a leaseholder or a tenant. Saying that, there may be a light at the end of the tunnel. In line with the right to access justice, it is confirmed that one leaseholder’s may have some hope. On 7 July 2015, the High Court has ruled that Eva Bokrosova, a resident of an estate in South London, can bring a judicial review of Lambeth Council’s plans to demolish the Cressingham Gardens estate. Lambeth Council now has 35 days to serve detailed grounds for contesting this challenge.

To that end, would you want to be a leaseholder, rather than a tenant? It seems it would be more beneficial to stay a tenant in this instance.

Our Social Housing Solicitors are backed by nearly four decades of experience. Our legal practice and team of London Solicitors have a strong track record of achieving favourable client outcomes. For expert legal advice use our contact form or call us on 0808 250 6017 today.