Agenda item

5.1  Ms G Mutch, an Aylesbury leaseholder, addressed the meeting.  She suggested that the process as it affected leaseholders needed to be made more user friendly.  In her view, fee-capping in relation to surveyors’ fees should be brought to an end, particularly as it made the process slower.  Generally, the slow speed of the process caused problems for everyone.

5.2  Ms Beverley Robinson, another leaseholder on the Aylesbury estate, agreed that fee-capping should cease and believed that legally no hourly rate could be imposed.  Ms Robinson stressed that leaseholders wanted to receive market value for their properties and that council valuations were very low and that often leaseholders were offered different values for similar properties.  She asked for more transparency in the process.  Ms Robinson stated that leaseholders could not buy an alternative property with what they were being offered and that the assisted schemes currently in place were not clear.  In respect of the shared equity option, she was not clear what would happen if a leaseholder subsequently wanted to sell the property and whether any increase in value could be retained.  Patrick McGreal, Principal Surveyor, confirmed that if a leaseholder owned 50% of a property then they would receive 50% of the value on its sale.  Ms Robinson stressed that guidelines needed to be shared with leaseholders.  She also stressed that there was now the possibility that leaseholders who had no mortgage had to take on a mortgage in order to take advantage of shared equity or ownership.

5.3  The Principal Surveyor clarified that the council had no general policy in respect of shared equity but that London & Quadrant Housing Association had make this available for leaseholders on the Aylesbury.  The following week the Cabinet would be considering a report on the introduction of an equity share scheme for regeneration areas.  Mr Michael Orey, representing the Homeowners’ Council, expressed concern that leaseholders be offered the full open market value of their property and that the council should be prepared to offer alternative accommodation.  In the view of the Homeowners’ Council, some of the current valuations were ludicrous.  Mr Orey also highlighted the possibility of increased service charges in new properties and of major works bills yet to come in.

5.4  The Principal Surveyor explained that valuation was calculated on the basis that no regeneration was taking place.  It took account of the construction of the property.  Sometimes the properties in question would not attract mortgages at a reasonable loan to value terms and therefore there were a limited number of buyers in the market.  Leaseholders on the Aylesbury had usually acquired mortgages on the basis of their right-to-buy discount or if they had borrowed only a small percentage of the value of the property.  In addition, the current criteria for mortgages had become more stringent.  The Principal Surveyor added that if the property was not being sold it might attract big service charges, for instance arising out of the council’s warm, dry, safe programme.  New properties attracted a premium in terms of value and were also mortgageable.  The council’s ownership schemes were in recognition of the fact that the price offered might not enable a leaseholder to buy another property.  In terms of different valuations for similar properties, this might reflect variance of value over time.  There should be a level of consistency if valuations were all done at the same time.  The Principal Surveyor offered to investigate where this was not the case.

5.5  Members asked for details of the procedure if valuations were not agreed between the leaseholder and the council.  The Principal Surveyor explained that there was the right for appeals to be determined by the Upper Tribunal (Lands Chamber).  This necessitated a fee which, depending on the outcome, might be awarded to whoever had referred the valuation.  The Principal Surveyor reported that out of 179 properties on the Heygate, 176 had been purchased without the valuation going to tribunal.  On the Aylesbury, 150 properties had been purchased so far with only two tribunal cases pending.  The Principal Surveyor advised the committee that the council was unlikely to seek costs in respect of the two appeals pending as the result would provide a legal view on the rationale for future valuations and acquisitions.  Mr Orey commented that a lot of leaseholders could not afford the fee needed to refer matters to the tribunal and to hire a lawyer.  He also suggested that amenity land value was not taken into account by the council in reaching its valuations.

5.6  In response to further questions, the Principal Surveyor reported that approximately a third of leaseholders instructed independent surveyors and that there was not always a big variance between the valuations.  He commented that some surveyors were working outside their usual geographic area and some outside their usual range of work.  A member highlighted the different valuations of the 3-bed maisonette referred to on page 14 of the agenda.  Mr Terry Redpath, a former leaseholder on the Heygate, explained that this reference was to the valuation of his property.  It had been difficult to find a local surveyor prepared to do the valuation.  Mr Redpath had felt bullied into accepting the council’s valuation and felt that there was a huge disparity in valuations across the estate, even between his own property and the property next door.  The Principal Surveyor clarified that a £20,000 difference in valuation was usually possible to resolve but that a £70,000 difference was a difficult gap to bridge.  A member of the committee suggested that it would be useful if there was an independent body which could provide advice to leaseholders and provide a list of surveyors.

5.7  A leaseholder attending the meeting stated that, when the process of regeneration had begun, leaseholders had been promised that if they found themselves unable to get back on the property ladder then the council would re-house them.  Assessment for re-housing was very intrusive and some applications had been closed because leaseholders had been unable to provide the necessary information.  The leaseholder felt that the council was not trying hard enough to work with its leaseholders.  Ms Robinson added that leaseholders had not signed up for an assisted housing scheme but to be given the current market valuation of their property so that they could buy on the open market.

5.8  Some members took the view that former council properties would always have a lower market value, especially in relation to new-build properties.  The chair of the committee stressed that it would be reasonable for leaseholders to expect that they would not be made worse off as a result of a regeneration scheme.  Time lags in schemes were a particular problem which also affected tenants, for instance on the Heygate where tenants had a right to return but where this was effectively lost because the regeneration process took so long.  A member of the committee hoped that because there was just one development partner on the Aylesbury phasing would be better.  It was important for leaseholders to be clear about timescales and clear about what was on offer, including the options of shared equity, shared ownership and return to council tenancy.

5.9  The leaseholders attending the meeting emphasised again that the process needed to be more user friendly and that valuation negotiations needed to be transparent.  Professional support should be available.  The option of a return to a council property was sometimes necessary.  One leaseholder explained that she had recently been made redundant and that the council had required a lot of details from her, including a statement as to why she wanted to continue living with her mother.  She also commented that, for many different reasons including age, banks might not be prepared to offer a mortgage on shared ownership.  The leaseholders stated again that in their view the means-testing of leaseholders was very intrusive and that the criteria was not clear.  Some residents could not afford rent or a mortgage.

5.10  The chair thanked the leaseholders for attending the meeting and sharing their experience with the committee.  The committee considered this in conjunction with the officer briefings it had received.

RECOMMENDATIONS:

1.  Overview & Scrutiny Committee welcomes the news that the Cabinet is about to consider the report, Shared Equity - An Additional Rehousing Assistance Route for Homeowners Affected by Regeneration.  The committee is conscious of the fact that regeneration causes enormous stress and potential upset for many leaseholders and asks Cabinet to look at ways of making sure that options such as shared ownership and shared equity are presented to leaseholders in as accessible and easy to understand a way as possible, so that information is clear and is delivered in an open fashion from first negotiation to moving day.

2.  Overview & Scrutiny Committee welcomes the news that two valuation cases are being considered by Upper Tribunal (Lands Chamber) and looks forward to the outcome of this.  The committee asks to receive the findings and arguments of the Upper Tribunal and that these are also distributed to the widest appropriate audience.

3.  Provided that there is no evidence that any party in the appeals has acted unreasonably, the committee recommends that in these two cases the council not seek for costs to be awarded against the relevant leaseholders.

4.  That Cabinet work with the Creation Trust to provide leaseholders with an independent list of surveyors, and review the level of fee cap for surveyors so that the ability of leaseholders to access surveyor advice is not restricted.

5.  That Cabinet look at better advertising of the work of Homeowners Council and LAS2000 and of the support for leaseholders administered by the CAB.