Information for Resident Leaseholders
July 2014
This leaflet sets out some early information for Resident Leaseholders of the Warwick Road estate (Broadwood Terrace and Chesterton Square).
The Council will define a Resident Leaseholder as someone who has lived in their property for at least 12 months prior to the date they are required to move out. This will allow sufficient time for current Non-Resident Leaseholders to become Resident Leaseholders if they so wish.
In the event that the Council decides to pursue redevelopment we will provide you with more detail on the options below as soon as possible.
What options are available to Resident Leaseholders if the Council decides to pursue redevelopment of the Warwick Road Estate?
Option 1: Buying an Equity Share in a new property in the redevelopment
All Resident Leaseholders will be offered the option to purchase an equity share in a brand new property within the new development.
Resident Leaseholders who wish to pursue this option will contribute the value of their existing home, plus any home loss payment, to the purchase of a new property. The Council will then retain an equity share in the property equivalent to the difference in the value between the old and the new property.
Under this option no additional mortgage costs will be incurred, as no rent or interest will be charged on the equity share that is held by the Council (so long as the Resident Leaseholder continues to live in the property).
To illustrate how an equity share arrangement would work, here is an example:
The Resident Leaseholder’s existing home is valued at £450,000.
The equivalent new home in the development is valued at £700,000.
The owner receives the value of their home, £450,000 plus 10 per cent Home Loss Payment, a total of £495,000.
The owner puts the total value of the old home and home loss payment into the new home – a total of £495,000.
The Council retains an Equity Share of the remainder, £205,000, or 29 per cent.
The owner decides to sell ten years later.
By that time the value of the property has risen to £900,000.
The Council recovers their share of the property i.e. 29 per cent of £900,000 = £261,000. The owner receives £639,000.
Option 2: Buying outright
Resident Leaseholders can purchase a property within the new development outright if they are able to raise the finance to do so.
Option 3: The Council will acquire your property
If you do not wish to return to the new development, the Council will purchase your property on terms equivalent to those to which you would be entitled to if a Compulsory Purchase Order had been granted.
The Council will offer you the market value of your property plus a 10 per cent home loss payment, up to a maximum of £47,000.
To assess the market value of your property, the Council will appoint a registered valuer to act on our behalf. If you wish, you can also appoint an independent registered valuer to act for you, and we will bear your reasonable costs in doing so. The two valuers will agree the value of your property between them.
What help and advice can I expect if the Council decides to pursue redevelopment of the Warwick Road Estate?
If the Council decides to redevelop the estate, we will meet with you individually to fully understand your circumstances and then provide you with detailed advice and information based on these. If you feel you would benefit from independent advice regarding your future housing options we can arrange for this to be provided free of charge.
Disturbance Payments
Whichever option you choose, you will also be entitled to Disturbance Payments. The principle of these payments is to ensure that you do not incur any expenditure due to the need to move that you would otherwise not have incurred.
Disturbance payments would cover the reasonable costs of the following:
· Solicitor’s costs;
· Conveyancing costs;
· Surveyor’s fees;
· Stamp Duty Land Tax;
· Land registry fees;
· Local search fees;
· Removal costs;
· Redirection of mail for each authorised surname living at your address;
· Telephone, television aerial and internet disconnection and reconnection, including additional lines;
· Disconnections and reconnections required to your washing machine, cooker, and dishwasher and to be carried out by suitably qualified engineer or plumber;
· Refitting carpets and curtains where possible or the value the carpets and curtains where this is not possible;
· The extra costs of new school uniform(s) if you move to a different area, which means your children have to change schools.
Can I sell my property now?
If you wish to sell your property before a decision is made in regard to redevelopment, you can advertise your property on the open market as normal.
If you prefer, you can approach the Council directly and we will purchase your property at its current full market value. The assessment of market value will disregard the fact that the Council is undertaking a review of the estate.
Can I still extend my lease?
The review will not affect any of your legal rights at this stage. We would advise you to get independent legal advice if you are considering extending your lease.