The London Assembly Housing Committee is investigating leasehold charges and their impact on Londoners. One of their aims is to assess the extent to which shared ownership – marketed as ‘affordable home ownership’ – becomes unaffordable in London due to these charges.
Sue Phillips, Founder of Shared Ownership Resources, was invited to give oral evidence to the Housing Committee on 12 December 2024.
The transcript of the meeting is available here.
Key points from Shared Ownership Resources’ evidence
- Some shared owners report – with the benefit of hindsight – not understanding what they were getting into. There is inadequate information on service charges at the point of sale..
- Improved transparency around service charges – under the new Leasehold and Freehold Reform Bill – is welcome. However, transparency does not in and of itself necessarily lead to affordability.
- It’s important to consider affordability in the context of 100% liability for the costs of repairs and maintenance, regardless of the size of a shared owner’s share.
- Many shared owners consider that they were mis-sold short leases. This is problematic as they have no statutory right to lease extension. Although the Leasehold and Freehold Reform Bill aims to extend this statutory right to shared owners it may not offer an affordable route, particularly for shared owners whose lease has a low number of years remaining. Will any new right be affordable to take up in practice?
- Shared owners may find that their total housing costs rise, over time, above the upper threshold determined affordable at the outset. Rapidly rising service charges can play a part in undermining affordability.
- High service charges can push staircasing out of reach by making it harder for people to save.
- High service charges can make homes harder to sell.
- Service charges are the third highest source of complaints, by shared owners, to the Housing Ombudsman.
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