Greenwich Council is revising its Leaseholder Repayment Policy to provide more consistent and formal terms for leaseholders facing capital major works invoices. The changes aim to balance the council's financial responsibilities with the needs of leaseholders, distinguishing between resident leaseholders, who live in their property, and non-resident leaseholders, who let their property out to tenants. The council argues that because non-resident leaseholders can derive income from their properties, and do not rely on it for their own housing, it is reasonable to offer them less generous terms, especially given that the Housing Revenue Account (HRA) pays interest on money borrowed to fund the council's capital programme.
The changes were considered at the Housing and Neighbourhoods Scrutiny Panel meeting on Wednesday, and the panel were scheduled to make recommendations to the Cabinet.
For annual revenue service charges, the repayment terms will remain unchanged: 10 months for resident leaseholders and 4 months for non-resident leaseholders. However, the council plans to levy late payment charges for outstanding annual revenue service charges, aligning with lease provisions and late payment legislation. The council says this will incentivise prompt payment and reduce any potential financial strain on the HRA. Late payment charges will be based on provisions within the respective leases and late payment legislation.
A significant change involves capital major works invoices. The council proposes a stepped repayment period based on the invoice value, offering a 2-year interest-free period for resident leaseholders. Non-resident leaseholders will not receive an interest-free period. The repayment terms are:
| Capital charge up to | Resident Leaseholder | Non-resident Leaseholder |
|---|---|---|
| £5,000 | 2 Years | 1 Year |
| £10,000 | 4 Years | 2 Years |
| £15,000 | 6 Years | 3 Years |
| £20,000 | 8 Years | 4 Years |
| £30,000 | 12 Years | 6 Years |
| £40,000 | 16 Years | 8 Years |
| £50,000 | 20 Years | 10 Years |
| £60,000 | 24 Years | 12 Years |
Interest on capital major works invoices will be charged at either the rate set out in the lease provisions or the Public Works Loan Board (PWLB) interest rate. Interest rates for both resident and non-resident leaseholders, unless the lease specifically requires a different approach, will be set on the 1 April of the year in which the invoice was originally raised, with this interest rate being fixed throughout the duration of the repayment period. A 5% discount will be offered for paying capital major works invoices in full within the first year.
The council estimates that offering the 2-year interest-free repayment period may result in a shortfall of up to £470,000 to the Housing Revenue Account (HRA) against capital bills of £5.4m. The council believes that this cost is justified because it lowers the risk of leaseholders not being able to afford their payments and seems consistent with the way other Boroughs charge leaseholders in receipt of large bills for capital works.
The proposed changes to the Leaseholder Repayments Policy include:
- Maintaining a 10-month repayment term for annual revenue service charges for resident leaseholders and a 4-month term for non-resident leaseholders.
- Levying late payment charges for outstanding annual revenue service charges.
- Introducing a stepped repayment period for capital major works invoices based on the invoice value, with a 2-year interest-free period for resident leaseholders.
- Charging interest on capital major works invoices at either the rate set out in the lease provisions or the Public Works Loan Board (PWLB) interest rate.
- Offering a 5% discount for paying capital major works invoices in full within the first year.
The council provides management services to more than 5,300 leaseholders, who pay capital and revenue service charges. The Public Reports Pack stated that formal leaseholder consultation on this report was undertaken via a relaunched leaseholder forum meeting on 22/7/25 with councillor/cabinet member for housing in attendance.
The Agenda Frontsheet for the meeting also included apologies for absence, urgent business, declarations of interest, and minutes from the meeting held on 9 September 2025.