Ground Rent gone up by 100%

MrJB

I think there is so much speculation on this thread.

Basic advice to anyone in the same position - read what the lease states in relation to rent due and the frequency of review.

Bordeuax

is it for this year in advance?

Irratus_Rusticus

princeofpounds wrote: »

The second important point is that when you renew your lease, the way ground rent is treated can change. ... So all this stuff about running away is nonsense

I haven't run all the numbers so I might be wrong, but if I wanted to extend my lease and achieve a peppercorn rent, I would have to pay a premium plus costs based partly on the existing ground rent?

I wouldn't want my premium to include capitalisation at say 8% yield on a ten year doubling GR all the way to the end of 111 years.

But that's just me as my math is lousy.

But I cautioned in post #2 that the second invoice might be an admin error. I only suggested getting the lease, not predicted the end of the world!

On the other hand, just possibly they only noticed the escalator anniversary had passed after they issued the first invoice. Anyone who innocently relies on agents to know what they are doing and doesn't read their own lease is in for an interesting life.

As everyone has said, the lease really is the only factual answer and needs to be read anyway. But if this thread helps one person read the lease BEFORE they buy, that would be nice.

JP08

Doubling every 10 years sounds horrendous. It actually works out at about 8% per year. Which is a lot compared to today's inflation rates, but is approximately the average rate taken over the last 50 years.

For what it's worth, that £2.30 coffee today would cost nearly £22,000 after 120 years at that rate.

glb

davidmcn wrote: »

Yes - do the invoices say which periods they relate to? Are you sure they've received your payment and that it hasn't just crossed in the post? If it's gone up to £200 a year, they're unlikely to invoice you £100 in December and £100 in January.

The more recent letter states about the payment i made in December 2015 but you are right - they have done it made it more confusing by sending two letters and in voices for the one year ground rent for jan - dec 2016

glb

Bordeuax wrote: »

is it for this year in advance?

It is for Jan- Dec 2016.

They usually send an invoice in November / December (which they did and I paid) however they have sent another invoice requesting more money.