Ground Rent Increase with RPI

tomryan89

Does anyone know if Ground Rent of £350 increasing in line with RPI every 5 years would put of mortgage lenders?

aneary

Depends on your affordability.

eg can you afford that ontop of your mortgage.

Btw my mortgage company didn't ask about the increases just the current cost.

tomryan89

It's my own flat that I am trying to sell. Trying to work out if the ground rent increase with RPI every five years would put off a mortgage lender of a potential buyer

aneary

Ground rent rises it's one of those things, it's inline with inflation so it shouldn't be an issue. Mine doubles every 25 years, so if I'm still in the flat in 10 years time it will go from £150 to £300.

I would be more concerned with a service charge cost tbh.

tomryan89

I didn't think a ground rent review in line with RPI every 5 years was a problem at all. My solicitor is telling me that some mortgage lenders may not lend with it in the terms.

That's a big problem as I need to sell the flat!

[Deleted User]

There is a huge groundswell of opposition to ground rent clauses / increases lead by disgruntled leaseholders and in particular new build houses with these types of clauses.

You may have read in the media about the nationwide no longer lending on such properties and maybe that is what your solicitor was alluding to.

tomryan89

Indeed, lots of articles about it.

I think my Solicitors were more concerned about the sale falling through because of the ground rent review period.

Anyway, I rang up the freeholder management company, told them I needed to re-mortgage but my lender had said they would not lend on a 5 year rent review period - surprisingly they said "ok no problem" and agree to change it to a 21 year rent review period.

Shocked but happy - a whole load of stress for nothing !!!