Typical ground rent charge

smudge2013

Hi,

I purchased a leasehold flat about a year ago. As part of the purhcase, I asked the previous tennant to renew the lease for another 99 years as the lease had run down to below 70. Previously, the annual ground rent was £50 per year, rising to £100 in 2016 and staying at that for 33 years. The new lease now has a new value for ground rent of £250 per year (although static for 33 years).

There's nothing I can do about it, but it seems fairly high. A lot of the research I've done online state its normally £50-100. What is most people's experience of ground rent costs?

Many thanks,

James.

katejo

jamesl85 wrote: »

Hi,

I purchased a leasehold flat about a year ago. As part of the purhcase, I asked the previous tennant to renew the lease for another 99 years as the lease had run down to below 70. Previously, the annual ground rent was £50 per year, rising to £100 in 2016 and staying at that for 33 years. The new lease now has a new value for ground rent of £250 per year (although static for 33 years).

There's nothing I can do about it, but it seems fairly high. A lot of the research I've done online state its normally £50-100. What is most people's experience of ground rent costs?

Many thanks,

James.

My old flat (bought in 1993) had a new 99 year lease. The lease stated that the rent was £100 but would go up to £200 after about 30 years and to £300 (I think) after about 60 years. In comparison the falt under mine didn't have a new lease and the ground rent was much lower.

embob74

The flat I bought in 2003 had a 99 year lease and ground rent was £400 a year.
Was quite naive at the time and didn't think to check whether it was high in comparison to others.
I put it down to experience - it's not a mistake I'd make again but I did realise the time to query it is BEFORE buying the property.

propertyman

jamesl85 wrote: »

There's nothing I can do about it, but it seems fairly high. A lot of the research I've done online state its normally £50-100. What is most people's experience of ground rent costs?

Well the research is wrong

It is very common to find ground rents at £350/£400 per annum especially in London and the average on new builds and new leases ranges from £150 to £300. Unless you are living in one of the few areas, £50 to £100 is on the low side. Similarly the price of the lease extension should reflect ( it is lower) for higher ground rents.

Now even though an extension has been granted you after 2 years have the right to an extension of a further 90 years and for the ground rent to revert to a peppercorn ie nil.

If you value that vs paying say £1000 over the time you plan to live there, say 4 years, which is cheaper?

breadlinebetty

jamesl85 wrote: »

Hi,

I purchased a leasehold flat about a year ago. As part of the purhcase, I asked the previous tennant to renew the lease for another 99 years as the lease had run down to below 70. Previously, the annual ground rent was £50 per year, rising to £100 in 2016 and staying at that for 33 years. The new lease now has a new value for ground rent of £250 per year (although static for 33 years).

There's nothing I can do about it, but it seems fairly high. A lot of the research I've done online state its normally £50-100. What is most people's experience of ground rent costs?

Many thanks,

James.

Could you not try buying the freehold in a few years?

Fire_Fox

jamesl85 wrote: »

Hi,

I purchased a leasehold flat about a year ago. As part of the purhcase, I asked the previous tennant to renew the lease for another 99 years as the lease had run down to below 70. Previously, the annual ground rent was £50 per year, rising to £100 in 2016 and staying at that for 33 years. The new lease now has a new value for ground rent of £250 per year (although static for 33 years).

There's nothing I can do about it, but it seems fairly high. A lot of the research I've done online state its normally £50-100. What is most people's experience of ground rent costs?

Many thanks,

James.

If the lease extension was done using the format prescribed in law then there should have been a 99 year extension with a peppercorn rent, which may explain many of the £50 ones you are seeing. You should have checked at the time this was what was happening, sounds like instead a private arrangement was made which you accepted when you purchased the lease.
http://www.lease-advice.org/publications/

smudge2013

Thanks for all replies. It seems there is a wide variation in ground rents. Although £250 seems high, it doesn't sound as high as some (thanks for the info property man).

In response to Fire Fox, I did indeed check what was happening at the time. Before exchanging I checked the new lease and saw that the new ground rent was £250. At this point the lease was signed by the previous owner - I/my solicitor wasn't privy to seeing it while they were renewing it as that process was strictly between the freeholder and the previous owner. I could have then chosen to reject the lease and therefore the property, but that would have been difficult at such a late stage.

propertyman

Fire_Fox wrote: »

If the lease extension was done using the format prescribed in law then there should have been a 99 year extension with a peppercorn rent, which may explain many of the £50 ones you are seeing. /

Erm no.... a peppercorn rent is exactly that, one peppercorn per annum.

mrchiggles

£300 a year on a new build flat in the North, doubles every 10 years!

martinsurrey

mrchiggles wrote: »

£300 a year on a new build flat in the North, doubles every 10 years!

Did the living room have a barrel in it when it was bought, or do the freeholders carry one around with them?

Would love to know what the stat lease extention premium is on terms like that.

Fire_Fox

martinsurrey wrote: »

Did the living room have a barrel in it when it was bought, or do the freeholders carry one around with them? Would love to know what the stat lease extention premium is on terms like that.

Might be worth extending the lease sooner rather than later, whilst market value and ground rent is relatively low - get a peppercorn rent.