More than £20million could be raised for new homes if Islington Council becomes the first to adopt a pioneering scheme suggested by homeowners.
The plan, thought to be the first of its kind in the country, would see the town hall offer leaseholders a one-off chance to extend their leases by 99 years at a knock-down price.
With around 11,000 people owning former council properties, the initiative could raise in the region of £22million if the price was set at £2,000 as suggested.
The idea is the brainchild of Brian Potter, chairman of the Islington Leaseholders Association (ILA), who contacted Cllr Catherine West, leader of Islington Council, to put forward the proposal.
He said: “The beauty of this idea is that homeowners get security for two generations and can leave their home to their children, while Islington Council get some much needed funds.
“I think they will go for it – I mean, they will definitely want the cash. Other councils are raising money by selling off properties…they’re selling the family silver.
“This way Islington get to keep the silver and make bundles of money by essentially selling cans of air.”
When people buy a former council home, they usually buy a lease for the property for a fixed period, normally 125 years, while the town hall retains the freehold.
When the lease gets down to around 80 years, it can be hard to sell or mortgage the property and extending the lease can be a costly, complicated process.
The cost of extending a lease on home worth £200,000 starts at around £7,500.
Under the proposed scheme the price of extending would be between £1,000 and £3,000 depending on the value of the property.
The council confirmed it was looking into the idea.
Cllr James Murray, Islington Council’s executive member for housing, said: “We are keen to look at new ideas like this, particularly at a time when we continue to face huge cuts to our funding by central government.”