Westminster City Council announces more generous payment options for leaseholders

The new plans, amongst the most generous in London, will ease the pressure on leaseholders with bills for major works.

Westminster City Council is introducing new payment options for resident leaseholders facing large major works bills, in response to challenges with the cost of living and increased building costs that have put many residents in a challenging financial situation. 

Those facing invoices of over £30,000 will be able to benefit from an 8-year interest-free payment plan – one of the most generous payment terms available to local authority leaseholders in London. They will also now having the option of paying back over 13 years, with the first 8 interest free. 

Additionally, the Discretionary and Voluntary service charge loans, which are available to leaseholders with bills of over £20,000, will now be interest free for the first 8 years and will no longer be dependent on the applicant having to show they weren’t able to secure financing elsewhere. 

This is part of the Council’s plans to limit the financial burden on leaseholders and tackle the cost of living crisis in Westminster. 

Cllr Liza Begum, Cabinet Member for Housing Services said: “The council has seen a sharp rise in the cost of essential major works to its buildings. 

“That’s why we are increasing the number and generosity of repayment options available to resident leaseholders in Westminster, to ensure that they can access the best possible financial support.  

“If you are a leaseholder and you want to know more, please contact our housing services team about accessing one of our updated payment plans.”

Background:  

The full details of the two new repayment options for resident leaseholders with major works bills are as follows:

• 8 years - If you receive an invoice for more than £30,000 you can spread payments over eight years in 96 equal monthly payments. This option will not be made available where the property is sublet, owned by a company, or owned by a housing association. You must complete an extended payment instalment form. No interest is charged.
• 13 years - If you receive a bill for more than £30,000 you can spread payments over thirteen years in 156 equal monthly payments. No interest is charged for months 1-96. Interest is charged on the balance remaining at month 96 at 1.5% above the Bank of England Base rate for months 97-156. This option will not be made available where the property is sublet, owned by a company, or owned by a housing association. You must complete an extended payment instalment form.
  
  For both of the Discretionary and Voluntary service charge loans, the criteria that leaseholders must have been unable to secure alternative financing has been removed and an interest free period of 8 years has been added. The full terms are now as follows:
  • Discretionary Service Charge Loan – This option is available for residents leaseholders who receive a bill for more than £20,000. It will not be made available where the property is owned by a company or owned by a housing association. Where the property is sublet, we will review the application on a case by case basis. The service charge loan will be secured by a way of a legal charge on the property for a maximum of 25 years. The loan capital and any interest will be repaid in monthly instalments over the lifetime of the loan. Years 1 to 8 will be interest free. Interest is charged on the balance remaining at the end of year 8 at 1.5% above the Bank of England Base rate for years 9 to 25. Interest is calculated monthly. You will also need to pay the administration costs involved. 
  • Voluntary Service Charge Loan - This option is available for residents leaseholders who receive a bill for more than £20,000. This option will not be made available where the property is owned by a company or owned by a housing association. Where the property is sublet, we will review the application on a case by case basis. The service charge loan will be secured by a way of a legal charge on the property. The loan capital and any interest will only be repaid when the property is sold (assigned). Years 1 to 8 will be interest free. Interest is charged on the balance remaining at the end of year 8 at 1.5% above the Bank of England Base rate until the loan is repaid. Interest is calculated monthly. The administration fees to set up the loan and to register the charge against the property can also be added to the loan. 
     
• Details of the Council’s other interest-free repayment plans for leaseholders with smaller major works bills can be found on the Council’s website (please note that this webpage does not yet reflect the changes to the other plans that have been detailed above): Major Works service charges payment plans | Westminster City Council 
• If you are a leaseholder who has received a major works invoice for 2025/26, you will have access to the new payment plans on offer when they are implemented. Any leaseholders who are on historic payment plans for invoice issued before April 2025 can contact the council directly about moving to a new plan.
• The Cabinet Member decision to approve these changes is subject to the usual call-in procedures. You can read the decision report here: HR25-05 CMR - Major Works service charges payment options.pdf