Ground rent doubling every 10 years

Gentoo365

As a comparison, I just looked at my 999 year lease (original term starts June 2003, sold at some point, then sold to me this year). The ground rent doubles every 25 years, which seems a bit more reasonable.

One thing that confuses me in this thread. Where did the assumption that an extension of a lease reduces the ground rent to 'peppercorn'?

Anyway, personally I would not proceed if it were an investment property. For any other type of use I would consider how much it matters what the value of the leasehold is when it came to selling.

For some purposes it does not matter too much if the property value falls.

kmmr

joanne1971 wrote: »

btw how do i press the the thanks button? As i really want to do it but dont know where it is. It says in my bit i have thanked people b4 but no idea how!

At the bottom right of each post, there are buttons to say 'Thanks' 'quote' 'spam' etc. Just press that.

joanne1971 wrote: »

Back to grant bovey - as i undertand it he owns/ owned imagine homes, woodgate place ane veritas so he is ust paying himself presumably.

Yes, the fact they are all related, and in administration may play to your advantage. Money would have changed hands between companies in 2007, but as they are all being wound up a deal may be done. If you CAN get the ground rent extinguished for £10k, it would be an excellent deal. But as a shareholder of Lloyds (as we all are!) I would probably rather they tried to get a slightly better deal.

Good luck though. You might get a good deal if you are willing to fight through the paperwork. Just make sure it is done as part of the conveyance, not 'almost' done, as once the sale goes through it will be very hard to get anything done. You hold the cards now, so make the most of it.

They will put pressure on you... but remember there are other houses, and keep calm. They will pressure you because this is a really big problem to solve, and they would rather offload it to someone else. On the flip side, few people will bother to try and fix it, so YOU are a VALUABLE buyer to them.

joanne1971

omg that is interesting - i really would not want you to do that for me as it sounds really time consuming but i will have a go myself- the post code is wa5 1ra.

joanne1971

thanks Gentoo365 the peppercorn has been told to me by the leasehold advisory centre and my own web research.

Gentoo365

kmmr wrote: »

I would suspect that only a few have the change made in 2007. But you can check both the statements above.

You'd have to spend a fair bit of time on the land registry site, but for each flat you can download the summary of the freehold information. That lists the rent (I think!!). If they are all owned by the same freehold, lots of this may be on the same document.

If you want, PM me the postcode and I will see if I can work it out. Lets see if there really have been mortgages on flats with this lease amendment! Or... and this would be a shock... the EA could be talking out his ...:eek:

I recently bought a property with an escalating lease (but 25y not 10y). Mortgage company did not even ask about it. In fact they only asked me to give the current ground rent/service charge (or an estimate) as part of the affordability calculation.

My solicitor was following the big HBSC guidance to solicitors (which I read out if interest) and I cannot remember anything that requested that they looked at increasing ground rents. I could be mistaken though, it is a long document.

kmmr

what numbers are the flats? Some of the properties in that [flat] are coming up as houses...

edit: I meant 'postcode' of course! Clearly getting late..

joanne1971

not sure all the numbers the one i want is number 11. i will investigate all the numbers tomorrow.

kmmr

Gentoo365 wrote: »

I recently bought a property with an escalating lease (but 25y not 10y). Mortgage company did not even ask about it. In fact they only asked me to give the current ground rent/service charge (or an estimate) as part of the affordability calculation.

My solicitor was following the big HBSC guidance to solicitors (which I read out if interest) and I cannot remember anything that requested that they looked at increasing ground rents. I could be mistaken though, it is a long document.

If the OP had a lease on your terms - so £350 doubling every 25 years, for another 119 years, the current value would be £16k. The frequency of doubling is a major factor. Bearing in mind the relatively low value of the flat too, the ground rent is a very high proportion.

Personally, I think the OP sounds like they have a very switched on solicitor.

kmmr

http://www.192.com/places/wa/wa5-1/wa5-1ra/ Here are all the sales in that post code.

You will notice a massive price drop in anything sold post 2007. 10 and 14 sold for mid £300's, are they totally different?

Work out which flats are comparable on this list, and I'll see if I get the freehold info. No rush! The weekend is a long one - woo hooo.

Gentoo365

joanne1971 wrote: »

thanks Gentoo365 the peppercorn has been told to me by the leasehold advisory centre and my own web research.

ok, I just skimmed The Leasehold Reform Housing and Urban Development Act 1993 (as amended), and also looked at Schedule 6 (the price determination).

...and it seems it correct, you can extend and reset the rent. However you would have to compensate the current owner.

I would not really want to do this. As before the rent becomes excessive all sorts of changes to the law could happen to stop unfair ground rent clauses etc. You may be paying up front for something that you can get out of later.

I would however look into the possibility of amending the lease to state that the ground rent doubles every 25 years instead of every 10 years. I would then deduct the cost of this amendment from the price I would be willing to pay.

However that all sounds like a lot of hassle, and may not even work. So it is also worth considering dropping out of this purchase.

I give the above opinion as a non professional, so don't rely on anything I say.