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Ground Rent - London

Hi all -
I'm a first time buyer and have had an offer accepted on a property, but just want to gauge opinion on a fair ground rent that you should be paying on a 2 bed flat in south london. Lease is under renewal at the moment & will be done before i complete, but clearly dont want to be buying a property with too high a ground rent because of resale value etc. What's a fair number? (its a 99year lease)

Thanks all
ftb101

Comments

  • Mobeer
    Mobeer Posts: 1,851 Forumite
    Part of the Furniture 1,000 Posts Academoney Grad Photogenic
    Maybe £500/year or less?
  • I can only comment on my flat in North London (also 99 year lease), where the ground rent is £75 per year, rising to £150 after 30 years. Seems reasonable to me.

    If I were you I would be interested in the service charges too as I know of people who pay thousands per annum whereas ours is under £500 per annum and has been since we first moved in in 1996.
    Mortgage to clear asap! - [STRIKE]£148,874.38 [/STRIKE]as at 1 May 2013
    £79,176.55 May 2018
    £59,516.06 July 2019
    November 2020 £35,914.62
  • ftb101
    ftb101 Posts: 4 Newbie
    thanks for the reply. definitely worth checking, have you heard of a ground rent being linked to the market value of the property? originally the lease renewal had it written in that after 10 years the ground rent moves to 1/2 of a percent of the value of the property. never heard of that before, and seems a bit outrageous considering property values in south london. have had it written out now and its stepping up each 33years to a round £ number, but worth people being aware of that it can happen, as would ruin the potential sell-on value of the property.

    ftb101
  • GDB2222
    GDB2222 Posts: 25,703 Forumite
    Part of the Furniture 10,000 Posts Photogenic Name Dropper
    I've seen index-linked ground rents.
    No reliance should be placed on the above! Absolutely none, do you hear?
  • katejo
    katejo Posts: 4,107 Forumite
    Part of the Furniture 1,000 Posts Name Dropper
    ftb101 wrote: »
    Hi all -
    I'm a first time buyer and have had an offer accepted on a property, but just want to gauge opinion on a fair ground rent that you should be paying on a 2 bed flat in south london. Lease is under renewal at the moment & will be done before i complete, but clearly dont want to be buying a property with too high a ground rent because of resale value etc. What's a fair number? (its a 99year lease)

    Thanks all
    ftb101

    My previous 1 bedroom flat (bought in 1993) had a new lease of 99 years and ground rent which started at £100 but was due to increase to £200 in 30 years and then to £300 in 60 years.
  • Lizling
    Lizling Posts: 882 Forumite
    edited 13 May 2013 at 7:15PM
    Mine's only a peppercorn ground rent (also 2bed flat in south London). It's mainly service charge that I have to pay. That and putting money aside ready for major works charges, since this block is managed by the council which means there's no sinking fund for repairs.
    Saving for deposit: Finished! :j
    House buying: Finished!
    Next task: Lots and lots of DIY
  • neverdespairgirl
    neverdespairgirl Posts: 16,501 Forumite
    Our ground rent (central London, lease from late 1990s) is £100 a year, rising to £150 after 100 years, and then up £50 every hundred years thereafter.
    ...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.
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