Doubling ground rent clause

cupofjava

Hello,

I'm buying a flat that has a clause which states the ground rent will double every 25 years. It's currently £150 and the first review period is in 2035.

This didn't bother me at first however the solicitor has mentioned it several times and won't advise me as to whether this is good or bad... Only that it's in the news a lot. It has however been accepted by nationwide for a mortgage.

I understand there have been big problems with those that double every 10 years. How normal is 25 years and is it likely to put off future buyers?

martinsurrey

Doubling every 25 years is roughly 3 percent inflation which isn't bad, and you get 24 years of deferred increase (by which I mean that in year 24 you are still paying £150 which is only about £77 in today's money at 3% inflation).

DumbMuscle

It might make the flat harder to sell just before a doubling period - but the effective inflation rate seems OK (it's a fraction above the average inflation since 1989). The 10 year ones which are a problem have an effective inflation rate of 7% - which is unreasonable as a long-term average, and higher than inflation has been since the 90s