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Friday, 19 September 2014

London RTB tenants 'forced out' of city

An article was recently published on the BBC website describing the plight of Council leaseholders faced with "regeneration schemes".

London Right to Buy tenants 'forced out' of city
By Zack Adesina BBC Inside Out, London 

For developers, businesses and local authorities, regeneration can lead to big profits, but Inside Out London has discovered that for some homeowners, who bought under the Right to Buy scheme, it can lead to the loss of their homes.

All over London, dozens of ageing council estates, past their prime, are being demolished to make way for redevelopments.

It means that leaseholders who bought their homes on these sites under the Right to Buy scheme are being hit with Compulsory Purchase Orders and forced to move out.

Local authorities are legally bound to reimburse these homeowners but Inside Out has uncovered evidence that shows some are being pressured to accept sums that are below market value.

'Fair price'

Ten homeowners on the Aylesbury Estate in Southwark say the council has priced their properties at such low rates it will leave them financially ruined and force them out of the capital.

But when the leaseholders hired independent valuers they came up with figures far higher than the council's.

Beverley Robinson, who bought her home on the estate over a decade ago, claims the local authority valued her flat at £117,000 while two independent valuers priced it at about £300,000.

Ms Robinson said if she accepts the council's offer she will have no choice but to move out of the capital. 

"You can't buy a home in London for under £140,000 which means I will have to start again, finding a mortgage, and at my age that's not an option. I will be turned down by the banks," she said.

Agnes Kabuto, who lives on the same estate, said the council had offered her £145,000 for her three-bedroom home while similar-sized properties in the area were going for about £385,000.

She said swapping her rent account for a mortgage was a mistake. 

"I regret buying under Right to Buy. I worked hard to pay for this property. It was meant to be my nest egg for old age but now I feel like the council has robbed me of my home," she said.

But Southwark's Cabinet member for regeneration, Councillor Mark Williams, said leaseholders are being offered a fair price.

Legal action

He said: "We are doing everything we can to work with homeowners who are required to move out.

"They are being offered market values for their properties... plus 10% for the inconvenience of moving."

The council also claims leaseholders who wish to remain on the estate will be able to move into new homes under shared ownership or shared equity.

Several of the affected residents are now considering legal action against Southwark Council.

But Southwark is not the only London borough where a row has erupted over a regeneration estate.

Inside Out has discovered that homeowners in Hackney, Hendon and Lambeth are also challenging the compulsory purchase amounts being offered by their local authority. 

2 comments:

  1. Hmmm a three bedroom flat is listed at £120,000 in this estate Lambeth, perhaps the Council valuation was not so far out?

    http://www.zoopla.co.uk/for-sale/details/34658820?search_identifier=f70ddf324df5feaed6d23b86ca698624#t1s8v0zfF21OOSHH.97

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  2. The sales history for the block on Zoopla indicates that a 1-bed flat sold for £125k in February:

    http://www.zoopla.co.uk/property/flat-57/ravenstone/bagshot-street/london/se17-2qr/21106819

    On that basis an asking price of £120k for a 3-bed flat is arguably below market price (for whatever reason).

    The real problem of course is that once a local authority identifies an estate or block as the subject of a regeneration scheme no-one will want to buy into it and prices will naturally fall. This allows the local authority to buy everything up on the cheap (i.e. significantly below "pre-announcement" prices) whilst claiming to be paying the "market price". A "market price" they have effectively manipulated for their own benefit.

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