High ground rent flat..bad idea?

Casa1862

Looking at buying a 2 bed flat valued at £140k in a Bedfordshire village, like the flat but has a ground rent of £605 per year and £100 per month service charge. It's got 99 year lease and built in 2005, seems London pricing to me, would it put a lot of buyers off, it is high or average for a 2005 build ?

cheap-information

Seems expensive. My London flat has a ground rent of £200, doubled every 20 or 25 years and a service charge of around £1400 per annum.

Casa1862

Thanks, that's what I'm thinking, London yes, but semi rural location makes it high I think. Makes lease renewals more expensive, £9 to £11k for a 90 year extension, twice as much as I'd expect.

economic

if you like the flat why not make an offer taking into account the cost of lease extention?

Casa1862

Don't think I'll get any reduction, fairly certain someone would come along who thinks £1800 per year for SC/GR is worth it. I'm a bit worried what they might be looking to increase it too.

Casa1862

I'd assume that's why it's £20k cheaper than it should be. It's as a btl which should rent for about £700 so £150 pm is quit a large chunk of that. I like the flat as nice location and in good condition, freehold houses start at £200k and don't rent for much more if anymore.

If the GR never went up during the full lease it could be manageable, can't say that about the SC which already shows the management agents are not shy of charging and would get worse. Think I might move on.

If the GR was fixed would the lease renewal stay the same or does it go up if I renewed later? Would paying the £9 to £11k for statutory 90 year lease extension be an option as it would extent the lease and mean no GR?