new build off the plan but lease start from 2011!

nish1013

I'm first time buyer. buying a new build flat off the plan.
I recently got the leasw details and not sure the ground rent is
reasonable or not . Below are the deails

From solicitors:

Term and Rent
The Lease is for a term of 125 years from 1 January 2011. The ground rent doubles every ten years from the term starting at £250.00, up to £2,250.00 for the remainder of the term. Ground rent is payable yearly in advance together with various other payments set out in the Lease. As you are obtaining a mortgage there will be a fee of £90.00 inclusive of VAT to pay to the sellers solicitors at completion to notify them of your mortgage lenders details for insurance purposes. You will of course be responsible for all outgoings payable in respect of the premises, e.g. Council Tax, public utilities and the like.
Service charge

From lease doc :

125 years from the 1 January 2011

£250 per annum for the first period of 10 years of the term
£500 per annum for the second period of 10 years
£750 per annum for the third period of 10 years
£1,000 per annum for the fourth period of 10 years
£1,250 per annum for the fifth period of 10 years
£1,500 per annum for the sixth period of 10 years
£1,750 per annum for the seventh period of 10 years
£2,000 per annum for the eighth period of 10 years
£2,250 per annum for the remainder of the Term

Could anyone shed a light on this ? need to decide Leave or take it.

Freecall

nish1013 wrote: »

The ground rent doubles every ten years from the term starting at £250.00

nish1013 wrote: »

£250 per annum for the first period of 10 years of the term
£500 per annum for the second period of 10 years
£750 per annum for the third period of 10 years
£1,000 per annum for the fourth period of 10 years
£1,250 per annum for the fifth period of 10 years
£1,500 per annum for the sixth period of 10 years
£1,750 per annum for the seventh period of 10 years
£2,000 per annum for the eighth period of 10 years
£2,250 per annum for the remainder of the Term

Something not quite right here. Is this really what your solicitor sent you?

If so, I would get another solicitor.

:eek:

nish1013

Freecall wrote: »

Something not quite right here. Is this really what your solicitor sent you?

If so, I would get another solicitor.

:eek:

This what they sent . First part in the letter sent by my soicitor . sexond part is on the doc from buyers solicitor .

Freecall

You could just put it down to a simple mistake but for such an important part of the transaction which has such significant financial consequences solicitors normally triple check.

nish1013

thank you all. any comment about lease ?

eddddy

That level of ground rent will make a future lease extension very expensive.

The ground rent may also be unacceptable to some mortgage lenders, and impact the flat's resalability.


You say you're buying off-plan... will you be arranging a mortgage after exchange? If so, you need to be very sure that your proposed mortgage lender will accept those ground rent terms.


Edit to add...

And are you being advised by a solicitor that you chose, or one recommended by the developer?

dimbo61

£250 per year for the first 10 years 2011-2021
"Ground rent then doubles to "
£500 per year for next 10 years 2022-2032
Ground rent then doubles to £1,000 2032-2042
Ground rent then doubles to £2,000 2052-2062
Now is Ground rent is limited to a MAX of £2250 it would go up to this level and stay till end of lease but you must check the facts with seller and your solicitor

nish1013

eddddy wrote: »

That level of ground rent will make a future lease extension very expensive.

The ground rent may also be unacceptable to some mortgage lenders, and impact the flat's resalability.


You say you're buying off-plan... will you be arranging a mortgage after exchange? If so, you need to be very sure that your proposed mortgage lender will accept those ground rent terms.


Edit to add...

And are you being advised by a solicitor that you chose, or one recommended by the developer?

Thank you. yes it's the solicitor recommend by developer. I got the help to buy approved and waiting for mortgage offer . but haven't exchanged the contracts yet. this ground rent put me off to proceed :mad: my worry about extention too

Freecall

I think that you probably need some independent legal advice - money well spent in my experience.

As far as the ground rent itself goes, only you can really judge. In some parts of central London ground rents on top-end flats can be many thousands of pounds a year, on the other hand many people pay virtually nothing.

As eddddy says, high ground rents make lease extensions very expensive and mortgages harder to get. With 125 years to go you will probably not be concerned with lease extensions but any future buyer may be.

Is this a mainstream housebuilder?

Where is it located?

How much are you paying for the lease?

nish1013

Freecall wrote: »

I think that you probably need some independent legal advice - money well spent in my experience.

As far as the ground rent itself goes, only you can really judge. In some parts of central London ground rents on top-end flats can be many thousands of pounds a year, on the other hand many people pay virtually nothing.

As eddddy says, high ground rents make lease extensions very expensive and mortgages harder to get. With 125 years to go you will probably not be concerned with lease extensions but any future buyer may be.

Is this a mainstream housebuilder?

Where is it located?

How much are you paying for the lease?

Than you . yes it's persimm** .Andover ,170K property price.

Freecall

nish1013 wrote: »

Than you . yes it's persimm** .Andover ,170K property price.

My own view is that ground rent at that level on a £170k lease is very high but we all have our own opinions in that respect so it will be interesting to see what others think.

Suppose you want to sell in 5 years time, the flat may then have an open market value of say £150k but the ground rent will be £500 pa. That starts to feel a bit out of character and could well depress the price lower than the general open market value.

Having said that, Andover is an improving area with good transport links to London. There is so much building going on there though that it is possible that at some point there will be over supply.