Ground Rent - highest ever?! Worried..

Sparky1

ok, so just back from MAB and speaking to FA - also had the leaseholders on speaker phone (I insisted). Have got to rule myself out of this one - no one, FA or the folk who own the land (jessons I think) just can not justify the cost - 'this cost covers sinking fund, communial areas, windows'. That was her response when I asked what £99 mth ground rent covered.

I then asked 'sinking fund?'. She replied - 'if the roof fell of your block of apartments and all the windows caved in, this is to cover the cost of such an event'. I then asked, are you not insured for that anyway - she repled 'hmmm'.

I then said to the FA, call me in a few days time, I'll have my decision - it will be a big no.

Overall, dissapointing - shelling out approx £800/mth total to cover mortgage, rent, ground rent etc on a 50% SO scheme for aproperty only worth £140K is a joke.

I'm a very keen to get my foot in the door so to speak, but as a project manager for a living, I know when something is not quite right when someone can not explain a charge that they are forcing upon you. Also, (while I'm moaning, I may as well carry on), there is nothing stopping these people upping that cost again after 12mths to whatever they want.

All in all, not a positive experience.

(just off phone with my current landlady - great lady!) - she is buying a further 3 developements in the town next to me and says she can really help me out if I wanted a property in the same developement (she owns approx 50 properties - privately) - so not all bad news today!

Again, thanks to all who provided advice on this one. Still welcome feedback, particulary from LynxPower who I'm told is the 'SO Queen' ;-)

Ta folks

lynzpower

it is ridiculous, you are right to walk away, depsite it looking like a nice place.

I cant believe that! So cheeky. especially as the builders have an NHBC guarantee for 10 years on the place,so if the roof "fell in" it would be them paying it in any case!!

lynzpower

ps hope you stick around here you seem really nice

Sparky1

LynzPower - you sweettalker you (you've won we over though!) ;-)
Just chatted to my land lady who as I mentioned is a good mate and extreamly knowedgable owning many many properties and her words were 'robbery'.

So, will certainly be keeping an eye on the goings on of this little site for further info on the general topic of first time buys. Keep up all the good work you guys!

Ta

scorpio_princess

Sparky1 wrote:

ok, so just back from MAB and speaking to FA - also had the leaseholders on speaker phone (I insisted). Have got to rule myself out of this one - no one, FA or the folk who own the land (jessons I think) just can not justify the cost - 'this cost covers sinking fund, communial areas, windows'. That was her response when I asked what £99 mth ground rent covered.

I then asked 'sinking fund?'. She replied - 'if the roof fell of your block of apartments and all the windows caved in, this is to cover the cost of such an event'. I then asked, are you not insured for that anyway - she repled 'hmmm'.

I then said to the FA, call me in a few days time, I'll have my decision - it will be a big no.

Overall, dissapointing - shelling out approx £800/mth total to cover mortgage, rent, ground rent etc on a 50% SO scheme for aproperty only worth £140K is a joke.

I'm a very keen to get my foot in the door so to speak, but as a project manager for a living, I know when something is not quite right when someone can not explain a charge that they are forcing upon you. Also, (while I'm moaning, I may as well carry on), there is nothing stopping these people upping that cost again after 12mths to whatever they want.

All in all, not a positive experience.

(just off phone with my current landlady - great lady!) - she is buying a further 3 developements in the town next to me and says she can really help me out if I wanted a property in the same developement (she owns approx 50 properties - privately) - so not all bad news today!

Again, thanks to all who provided advice on this one. Still welcome feedback, particulary from LynxPower who I'm told is the 'SO Queen' ;-)

Ta folks

£99 a month for a sinking fund on a brand new flat? They're 'avin a larrf!!! How come if you're buying a flat for half the amount (I assume it would be 50% owned), you aren't allowed to pay half the extra fees? A service charge is payable on most flats these days, which generally includes your share of the buildings insurance, maintenance of common areas (lights, gardens, car parks etc) and a sinking fund (to pay for big jobs that need doing every now and again). I've never heard of ground rent being more than £50 per year!

Who does the other half of this flat belong to? Is it a Housing Association? If so, you would have to pay a proportionate rent on the part you don't own to the HA until you own 100% of the property, but this isn't usually a lot. One flat I looked at (until I realised I wasn't eligible because i'm not on the council waiting list) was on for 50k SO, with a rent of £115 a month on the non-owned part, which isn't too bad at all. But this is because it's a HA flat - is the one you looked at a private SO company? If so, I'm afraid I can't say anything about those because they don't seem to have made their way up the A11 as yet (perhaps it's a good thing they haven't if this is anything to go by!)

Sparky1

scorpio_princess wrote:

£99 a month for a sinking fund on a brand new flat? They're 'avin a larrf!!! How come if you're buying a flat for half the amount (I assume it would be 50% owned), you aren't allowed to pay half the extra fees? A service charge is payable on most flats these days, which generally includes your share of the buildings insurance, maintenance of common areas (lights, gardens, car parks etc) and a sinking fund (to pay for big jobs that need doing every now and again). I've never heard of ground rent being more than £50 per year!

Who does the other half of this flat belong to? Is it a Housing Association? If so, you would have to pay a proportionate rent on the part you don't own to the HA until you own 100% of the property, but this isn't usually a lot. One flat I looked at (until I realised I wasn't eligible because i'm not on the council waiting list) was on for 50k SO, with a rent of £115 a month on the non-owned part, which isn't too bad at all. But this is because it's a HA flat - is the one you looked at a private SO company? If so, I'm afraid I can't say anything about those because they don't seem to have made their way up the A11 as yet (perhaps it's a good thing they haven't if this is anything to go by!)

Scorpio Princess

Thanks for your thoughts. Appreciate it. Deal is - 50% with a private company owning other half. That £99/mth is additional to the maintenance charge per month! (approx £20). The property is £140K outright which you can do through Barratt homes.

No need to be on council waiting list for these - anyone (preferbly 1st time buyers) are accepted onto the scheme (took 24 hrs for me to be accpeted). Not a run down area, I'm not on a low income (quite young, but income is relatively good).

Not possible to only pay half of the charges - althought that would make sense I would only own half.

All in all, doing my sums (thoroughily), very expensive offer. I can see why first time buyers would 'fall for it' but not me in this instance - my advise, avoind barratt homes on SO schemes - althought it may the private company (Jessons I believe) who is responsible for this joke of an offer.

Ta

Doozergirl

Oh dear. At least you found out now and not when you'd started spending money.

It does sound at those prices like you'd be almost be paying the equivalent of a straightforward mortgage on the same property.

Onward and upward (as they say!)

Sparky1

Doozergirl wrote:

Oh dear. At least you found out now and not when you'd started spending money.

It does sound at those prices like you'd be almost be paying the equivalent of a straightforward mortgage on the same property.

Onward and upward (as they say!)

Good advice. A property expert once told me if a property falls through, its for a reason and another door will open - hopefully so!

Cheers

ps - what a great forum! :T

tomstickland

Sinking fund should be part of the service payment. Are you totally sure that the £100 isn't total of service charges + ground rent? It's still on the high side though.

That £99/mth is additional to the maintenance charge per month! (approx £20).

£120 pcm is too high. You've done the right thing.

Sparky1

tomstickland wrote:

Sinking fund should be part of the service payment. Are you totally sure that the £100 isn't total of service charges + ground rent? It's still on the high side though.


£120 pcm is too high. You've done the right thing.

The private company, the FA, the MAB all told me (plus, I have it in writing) that the £100/mth is not the service charge. Believe me, I have asked all involved and confirmed in writing.

Ta