Ground Rent - highest ever?! Worried..

Sparky1

Hello all.
Im in the market for a first time buy - probably shared ownership scheme to get on that golden ladder.
However, the biggest 'snag' of the nicest new apartment that I have viewed is the ground rent cost - 99 year lease, with £99 per MONTH ground rent. This is on top of other 'maintenance costs'.
I've researched the topic of ground rent extensively and this seems to be at least 500% more than all other similar new builds in the area - can this be right? If anyone can shed any light on this, I am quite willing to send the weblink of the property via email.

Thanks in advnace folks!

Doozergirl

It could be in the more Central Parts of London but are you sure it doesn't cover the Service Charge too? That would sound more reasonable.

Of course, if a proper maintenance project needed carrying out later then this could be the explaination of 'maintenance costs'.

Don't know, just throwing in a suggestion!

RHemmings

Would you be paying a service charge on top of that?

Doozergirl beat me. But rather than delete my post, I'll say that I have heard of newbuild flats with £100 per month service charges.

tomstickland

We pay £75 per month service charge on our modest 1 bed flats out in the sticks. The local going rate is more like £35. That's why we're buying the freehold and going to self manage. Ground rent is £25 per year.

Sparky1

Thanks for your prompt replies - such a relief to know people are offering advice out there!
The apartment is in the Midlands - nothing special about the area and this does not (99% sure) cover service/maintenance charges - thats additional. Again, if you want the weblink, just ask.
Updated thoughts now? Thanks

RHemmings

Sparky1 wrote:

Thanks for your prompt replies - such a relief to know people are offering advice out there!
The apartment is in the Midlands - nothing special about the area and this does not (99% sure) cover service/maintenance charges - thats additional. Again, if you want the weblink, just ask.
Updated thoughts now? Thanks

I personally would not touch such a newbuild with a bargepole. Well I wouldn't touch any newbuild flat with a bargepole. But even if I was in the market for a newbuild flat I wouldn't touch that one with a bargepole. If the ground rent is so expensive, it would put off potential purchasers, and make it much harder to sell.

I would like to see the weblink.

cattie

Are you sure it isn't a misprint? As you say, it's far in excess of what a ground rent would usually be in London.

I've owned 3 flats in reasonably central parts of London & the highest ground rent I've had to pay is £50 per year, which would rise to £75 per year after the first 33 years & then to £100 per year for the final 33yr term. I admit I don't know how shared ownership properties compare.

tomstickland

Do the sum where you convert the £100 pcm into equivalent mortgage borrowing.
On a £120 mortgage over 25 years at 4.5% then £100 extra per month would be the same as taking out a £138K mortgage.

Doozergirl

You can pm me the link or just post it here if you want I'm a midlander these days so I'd be interested to see!

Sparky1

I have my third and potentially final appointment with the Mortgage Advice Bureau financial advisor tomorrow so will query it with him then. Its got to be a mistype, right?! I'll certainly update when I find out. As it is shared ownership (SO=50/50), my mortgage amount is £65K. Thanks again

Sparky1

Link PMd to Dozzergirl - stand by to find out if I have read wrong (this could be embarrassing!) ;-)