• New powers to adjust the freehold ground rent developers charges to ensure they are set at a level that enables the developer to reduce leaseholder ground rents.
• Maximum ground rent charges of £250
Newham Council’s Cabinet has agreed to a new maximum cap of leaseholder charges for residents living in private residential developments built on Newham Council owned land.
The Council will support private residential development leasehold owners where high ground rents are affecting their ability to sell their homes and impacting on their cost of living due to extra financial pressures. As part of the Council’s Building a Fairer Newham Corporate Plan which champion’s the interests of Newham residents particularly in the face of the cost of living crisis, the new maximum cap on ground rent charges eases the pressure on households.
Maximum ground rent charges of £250.00 per annum for a 1 bedroom property, £350.00 per annum for a 2 bedroom and £450.00 per annum for 3 bedroom properties or larger will now be applicable.
The Council’s new ground rent policy seeks to avoid further financial hardship where possible, while also campaigning for national government to bring forward better protections for Newham residents living in private residential developments so that they get a better deal.
The agreed policy will enable the Council to publically make residents, developers and other parties aware of its position and exert all levels of influence it has, so that developers can demonstrate their responsiveness to the position facing Newham residents.
Councillor Shaban Mohammed, Cabinet Member for Housing said:
“We know the pressures facing households because of the Cost of Living crisis, with food prices and costs on the rise. We also know that many Newham residents face increases in the ground rents they pay in the private residential developments they live in – in some cases from £400 to £800 per annum for a typical 2-bed flat. Such increases are becoming unaffordable, leading to increased financial hardship for our residents including the threat of losing their home.
“This is not just affecting those currently living in these private residential developments, but it's also impacting those looking to move. They are unable to obtain mortgages from high street lenders and sales are failing to proceed. Sellers are left trapped in homes that have become financially unviable for them or are prevented from progressing with their future life plans.”