1.3bn ground rent....

csgohan4

http://www.bbc.co.uk/news/video_and_audio/headlines/38834621


Another reason to read the lease and ensure your solicitors are not muppets i.e EA referred

MyOnlyPost

How do you sign anything by mistake? Your hand accidentally wonders across the paper whilst holding a pen and you doodle your signature unconsciously.

Signed it without realising what I was signing for would be far more apt

sparky130a

Well he could at least have spent £30 on an iron for that shirt for a start.....

HouseBuyer77

I wonder if the doubling every 10 years clause was pointed out to him by his solicitor?

I do think the practises of firms that work with builders as their recommended solicitors should be looked in to. Are people buying these leasesholds, being decently informed, then only later really thinking about it or are solicitors not pointing out things like the rent doubling every 10 years and how this is a bad thing?

PasturesNew

This is non-news and not his worry - in fact I'd have stayed quiet...

£250/year now. It doubles every 10 years.
190 year lease - in the year 2200 it'll be a fortune.

Not his problem ... if he's still alive in 2200 come back and moan.

Not his problem for 10 years, then it's just £500.
Not his problem in 20 years as by then it'll be just £1000
In 30 years it'll be £2000, which is about what a lot are now.
In 40 years it'll go up to £4k - he'll be mid-60s. Not really his problem, but it's a good time to sell it on and move .... if he's not already done that before.

csgohan4

problem is when he comes to sell, no one in their right mind will accept terms of that lease. Unless they like being a charity

moneyistooshorttomention

Also - there are younger people that will buy a house and then just stay there for the rest of their lives (whether by choice or otherwise).

£4,000pa is a large amount to most of us if inflation hasn't eaten away it - and we can all see we're being told inflation is virtually non-existent and many haven't had much of a payrise for some time.

steampowered

This is only one of many such cases. Have a read of http://www.gosschalks.co.uk/insights/view/you-meant-what-you-said-supreme-court-rules-against-tenants-in-holiday-park.

That is a dispute which reached the Supreme Court last year. It concerned people who bought pitches at a holiday park. The service charge mechanism that provided for a fixed annual charge of £90 for the first year of the term, increasing each subsequent year by 10% on a compound basis.

This meant that by 2072 each tenant will be liable to pay ground rent of over £550,000 a year.

MyOnlyPost wrote: »

How do you sign anything by mistake? Your hand accidentally wonders across the paper whilst holding a pen and you doodle your signature unconsciously.

Signed it without realising what I was signing for would be far more apt

These clauses are buried in the detailed terms of the lease. I honestly think that a majority of people rely on their solicitor and do not the full lease terms. If they do read it they may not fully appreciate the implications.

Also, if you were to buy a leasehold property, you would be bound by the lease terms without needing to sign anything.

JP08

I've said it on here before, but if does bear repeating.

Doubling every ten years is an annual inflation rate of 7.2%.

According to this site : http://inflation.stephenmorley.org/
£1 in 1827 is worth £90.90 in today's money - that's an average inflation rate of 2.4%

Over the last 50 year (since 1967), it comes out at 5.8%

So, in a highish inflation economy the ground rent deal isn't horrendous - not nice, but not horrendous.

The question is whether today's inflation rates are here to stay or not. Looking at the historical table on that site, I wouldn't bet on it. (Also it's interesting to note just how "boom and bust" the Victorian era was - and it's easy to spot the Wall St Crash in the 20's and the serious deflation then, as well as the WW1 and 2).

davidmcn

steampowered wrote: »

Also, if you were to buy a leasehold property, you would be bound by the lease terms without needing to sign anything.

You agree to buy the property subject to its existing lease terms, after (hopefully) your solicitor has explained them to you.

martinsurrey

steampowered wrote: »

Also, if you were to buy a leasehold property, you would be bound by the lease terms without needing to sign anything.

how do you buy a leasehold without signing anything!?!