Right to a loan

If you are the leaseholder of a flat bought under the right to buy scheme you may have the right to a loan in respect of service charges for repairs and improvement works to your property (major works). It does not matter whether you are the original purchaser, you could still have the right if the property is within the first 10 years of the lease being granted. You can borrow between £750 and £29,740. Read our Right to a Loan leaflet.

If you do not qualify for the right to a loan, you may be able to apply for a discretionary loan.

Discretionary Loans

A Discretionary loan can be given to any leaseholder whose property was sold under the Right to Buy Scheme and who meets the criteria for granting a loan.

In deciding whether or not you will be granted a loan the following will be taken into account :

• There must be sufficient equity in the property to provide security for the loan. This means that the market value of your home less any debts secured against your home, must be greater than the amount you are asking to borrow. 
• Whether the property is owned by an individual/s or a company. In general a discretionary loan will not be granted to a company. 
• Whether the property is your only or principal home. In general if the property is not your principle home and particularly if the property is let for commercial gain, a discretionary loan will not be granted. However, individual circumstances will be considered. 
• Your ability to repay the loan. You will be required to complete an income and expenditure form. This will be used to assess the amount you can borrow and the repayment period.

Loans granted under the Right to a Loan or Discretionary Loan is secured by a mortgage on the property. As with other mortgages if you do not keep up repayments on the loan you can lose your home.

Interest is payable on the amount loaned. The interest rate is variable throughout the period of the loan.

 

Please note that the interest rate offered by the Council may not be the cheapest available. Leaseholders are strongly advised to make enquiries with other lenders, including their own mortgage lender.

 

There will be an additional charge for administration, this will be for the Council’s valuation and the legal cost, the loan agreement and registration of the charge.

For general enquiries regarding a loan, please contact Leasehold Services on 020 8314 8211 or leasehold@lewishamhomes.org.uk.

 

Please note that although Lewisham Council is responsible for granting the loan, the application and administration process will be dealt with by Lewisham Homes.