Facts and Figures on Central Hill Estate

Your Central Hill Estate

Option for In-Fill and Refurbishment: Report by Lambeth Council

 

Financial and Legal Considerations

  • Homes for Lambeth and Lambeth Council are separate legal entities – so the new company would be taking on an early debt for properties on which it had no legal ownership status, and would not therefore represent assets against which debt could be incurred.
  • £18.5 million – plus inflation would be a cost to the scheme.
  • An additional £18.5 million of borrowing would attract an interest charge of £1 million per annum.
  • There would still need to be a capital input from Lambeth to the scheme – in the region of £7 million.
  • The debt for the redevelopment (83 units) and refurbishment would be over a period of 30+ years, whereas the lifecycle of the elements replaced as part of a refurbishment option would be less.
  • The new entity would not have the asset base against which it could borrow finance to complete the refurbishment work.

Comment: Architects for Social Housing

If the organisation of Homes for Lambeth precludes refurbishment and infill, which is the most economically viable and environmentally sustainable design option, then Homes for Lambeth is the wrong economic model, not only for Central Hill but for all Lambeth regeneration schemes, which by its own admission it cannot refurbish. It puts the cart before the horse to let the legal structure of a company that has not even been created yet dictate the regeneration of an estate and the future of thousands of people’s lives across the borough. Given its declared intention to use this Special Purpose Vehicle, it is doubtful that Lambeth Council have ever considered infill and refurbishment as genuine options for estate regeneration. The only conclusion we can draw from this report is that Homes for Lambeth is a legal entity designed purely for the demolition and redevelopment of the borough’s housing estates. 

The Regeneration of Your Estate

There is an urgent need for new, genuinely affordable homes in Lambeth. There are 21,000 households on the housing register and prices for homes to rent and buy are rising beyond the reach of many local people.

In December 2014, the Council resolved to review its existing estates to identify those where:

  1. The costs to bring the homes up to the Lambeth Standard are prohibitive;
  2. Refurbishment works themselves will not address underlying problems faced by residents, such as poor design, poor access, crime and anti-social behaviour; and/or
  3. There is potential to deliver additional homes.

From the Council’s perspective, the primary purpose for initiating the estate regeneration programme is to deliver more affordable housing. The Council has committed to make sure that existing tenants will be able to continue to live on their estate, regardless of how that estate is regenerated.

Having made this guarantee, the Council has made a further commitment with you and your community to enable you to influence how your estate is regenerated. This is an opportunity for you to work with the masterplanning team to help shape the future of the place that you live

– Councillor Matthew Bennett, Cabinet Member for Housing

Lambeth Council’s Key Guarantees in Estate Regeneration

 

Key Guarantees for existing Secure Tenants

1. Any secure tenant who wishes to continue to live at their current estate will have the opportunity to do so.

2. Any secure tenant who wishes to remain a council tenant will be able to do so.

3. Secure tenants who have to move will have the choice:

  • EITHER to take an assured lifetime tenancy as a tenant in a new home on the estate.
  • OR, if available, to take a secured tenancy in an existing refurbished home on the estate.
  • OR, will be given high priority to bid for a new home elsewhere in the Borough through the Choice Based Lettings scheme.

Key Guarantees for existing Resident Homeowners

1. Any resident homeowner who wishes to continue to live at their current estate will have the opportunity to do so.

4. New Leasehold: Homeowners will be able to acquire the leasehold of a new home on their existing estate (100% equity share)

5. Shared Equity: If resident homeowners are unable to afford the full value of a new home, then they will be able to acquire a lower equity of a new home. The equity share that a resident homeowner owns should normally not be less than 60% of the value of the new property.

6. Shared Ownership: Resident homeowners will alternately have access to shared ownership of a new home on the estate, according to the following criteria:

  • Minimum equity share to be 25%.
  • Rent payable on the Council retained equity of 2.75% per annum.

 

Differences between Secured and Assured Tenancies

Secured Tenancy (from 1985 Housing Act)

RIGHTS

Council tenants are secure tenants and have the following rights:

  • Right to succeed to tenant’s spouse or close family member after 12 months
  • Right to assign to tenant’s spouse or close family member after 12 months
  • Right to mutual exchange
  • Right to take in lodgers and sublet
  • Right to repair
  • Right to make improvements
  • Right to information
  • Right to consultation
  • Right to Buy
  • Rent to Mortgage
  • Right to Manage

GROUNDS FOR POSSESSION

Secure tenants can only be evicted if the council proves to a court that one of these grounds are true. The court has discretion and will only evict if it believes it is reasonable:

  • Rent is due and has not been paid, or a tenancy obligation is broken
  • Domestic Violence
  • Tenant or person living in the house has caused nuisance
  • Property in bad condition due to tenant’s neglect
  • Tenant bad treatment of common parts
  • Tenant made false statements to get tenancy
  • Tenant paid for a mutual exchange
  • Property let to tenant in connection with work and the work has ended.
  • Tenant lived in property temporarily while the landlord did works to their main home

Secure tenants can be evicted if suitable alternative accommodation is available:

  •  Property overcrowded
  • To demolish or reconstruct property
  • Charitable landlord and the tenant occupation conflicts with charity’s aims.

Secure tenants can be evicted if it is reasonable and suitable alternative accommodation is available:

  • Needed to be let to worker
  • Adapted for someone with a disability
  • Let by special needs housing association
  • Let by landlord for special needs
  • Too large for tenant who wishes to succeed or be assigned

Assured Tenancy (from 1988 Housing Act)

 RIGHTS

  • Right to succeed to tenant’s spouse

GROUNDS FOR POSSESSION

The following are referred to as mandatory grounds for possession: if the Landlord has followed the correct procedure and the case is proven, the Court has no discretion but must issue a possession notice.

Grounds on which a court MUST order possession:

  • Landlord needs it as their home
  • Landlord has a mortgage and needs to sell
  • Fixed term tenancy
  • Property is let to a religious minister
  • Housing Association leases a property and the landlord wants to demolish or reconstruct
  • Within 12 months of Tenants death when new tenant does not have right to succession
  • 8 weeks rent owed

Grounds on which a court MAY order possession:

These grounds differ from the above in that the Court has discretion and will only issue a possession notice if it believes it is reasonable to do so.

  • Suitable alternative accommodation is available
  • Rent was due when notice was served and when the case comes to court
  • Rent is paid persistently late
  • Tenancy agreement broken
  • Domestic Violence
  • Property in bad condition due to tenant’s neglect
  • Tenant bad treatment of common parts
  • Tenant has caused nuisance
  • Tenant let property due to employment now finished

Lambeth Council’s Projected Increases to Rents and Sales

 

Figures for Cressingham Gardens Estate, Brixton:

MONTHLY INCREASE

Bedrooms     Rent/month  Increase        New rent       Percentage increase

1-bedroom:    £412pm         £95pm            £507pm         23%

2-bedroom     £468pm        £117pm           £585pm         25%

3-bedroom     £537pm         £87pm            £624pm         16%

4-bedroom     £624pm        £61pm            £685pm         10%

WEEKLY INCREASE

Bedrooms     Rent/week    Increase        New rent       Percentage increase

1-bedroom     £95pw            £23pw             £117pw          23%

2-bedroom     £108pw          £27pw            £135pw          25%

3-bedroom     £124pw          £20pw             £144pw         16%

4-bedroom     £144pw          £14pw             £158pw          10%

 

Private rents on the estate will start at £1,534pm for a 1 bedroom home, going up to £3,281pm for a 4 bedroom home.  This is not a viable option for any homeowner who is unable to take out a mortgage to remain a homeowner and will be forced back into private rental.

Private sales will start at £435,000 for a 1 bedroom, flat going up to £863,000 for a 4 bedroom flat. Lambeth’s proposed average buy-out prices for homeowners is around £250,000 for a 1-bedroom flat, going up to around £470,000 for a 4-bedroom home. In effect they will be almost doubling house prices on the estate.

Tenant Participation Advisory Service

This report has been prepared as the Housing and Planning Bill is passing through Parliament. Amendments tabled to date indicate that this legislation may be materially relevant to the management of tenancies and regeneration once enacted. It is strongly recommended that the Council identifies and takes account of any relevant provisions once the final text of the legislation is available.

– Abigail Davies and Kate Newbolt, Key Guarantees in Estate Regeneration: Review of Policy and Good Practice, London Borough of Lambeth (January 2016)

Your Central Hill Estate (2)

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