Bought a flat with doubling ground rent every 10 years

Experting

HI All,

I have recently bought a flat which is around 9 years old (1st time buyer) not aware of what really to look for and the solicitor did not point this out to me. I have come across a news article about the doubling of ground rent every 10 years up to 50 years. There is currently 116 years left on the lease

Upon checking my lease contract it does state that the ground rent will double every 10 years up to a max of 50 years. It currently at £150 a year so It could end up going up to to some crazy amount after 50 years. I have not bought it directly from Taylor Wimpey (They built the flats) as the flat had been sold to someone and i purchased it from them.

What the hell am i suppose to do now? How can i avoid the doubling of ground rent every 10 years clause? I am also a little annoyed the solicitor did not point this out to me.

elverson

[STRIKE]See below.

https://www.taylorwimpey.co.uk/leaseholdfaq[/STRIKE]

Who is the freeholder for your property?

Guest101

Experting wrote: »

HI All,

I have recently bought a flat which is around 9 years old (1st time buyer) not aware of what really to look for and the solicitor did not point this out to me. I have come across a news article about the doubling of ground rent every 10 years up to 50 years. There is currently 116 years left on the lease

Upon checking my lease contract it does state that the ground rent will double every 10 years up to a max of 50 years. It currently at £150 a year so It could end up going up to to some crazy amount after 50 years. I have not bought it directly from Taylor Wimpey (They built the flats) as the flat had been sold to someone and i purchased it from them.

What the hell am i suppose to do now? How can i avoid the doubling of ground rent every 10 years clause? I am also a little annoyed the solicitor did not point this out to me.

Well you'd pay it for now, eventually you would use the right to manage, along with other leaseholders, to set your own rates.


But consider this, the cost is set for £150 a year for ten years, but the actual cost will rise.


After ten years it is set to £300, which is probably the correct rate and again stays that way for ten years.


Would it be any different if the cost increased year on year, so the increase was smaller, but the total was the same?

Experting

elverson wrote: »

[STRIKE]See below.

https://www.taylorwimpey.co.uk/leaseholdfaq[/STRIKE]

Who is the freeholder for your property?

I have had look at this & Taylor Wimpey will not help as i did not buy the property from them. I believe they sold the freehold onto another company.

Guest101 wrote: »

Well you'd pay it for now, eventually you would use the right to manage, along with other leaseholders, to set your own rates.


But consider this, the cost is set for £150 a year for ten years, but the actual cost will rise.


After ten years it is set to £300, which is probably the correct rate and again stays that way for ten years.


Would it be any different if the cost increased year on year, so the increase was smaller, but the total was the same?

Its more about the re-sellability of the flat when I come to sell it. Is there any way to avoid the charges? Ive heard if i extend the lease (after i have lived here for 2 years) i will end up paying 'peppercorn' which is £0 ground rent, is this correct?

TBF i am more annoyed the solicitor did not say anything about this.

teddysmum

There is only a small chance that you will still be there in 50 years' time, but by then £4800 will probably be relatively little.


Back in the 1970s it would have bought you a newly built semi with garage and garden, in many areas.

ThePants999

Guest101 wrote: »

Well you'd pay it for now, eventually you would use the right to manage, along with other leaseholders, to set your own rates.

How is that relevant? We're talking ground rent, not a service charge. Any upkeep costs are presumably on top of this!

davidmcn

Experting wrote: »

TBF i am more annoyed the solicitor did not say anything about this.

You may have a case. How long ago did you buy? What did the solicitor tell you about the title?

ThePants999

Experting wrote: »

Ive heard if i extend the lease (after i have lived here for 2 years) i will end up paying 'peppercorn' which is £0 ground rent, is this correct?

I believe so, but the cost of extending the lease will account for the ground rent you would have paid, so it'll be significant.

MonkeyDr

I might have misunderstood, but isn't the furore about ground rent that doubles every 10 years ad infinitum, rather than stopping after 50y?

As has been pointed out 4800 probably won't seem too bad in 50 years, although £150 in 1967 is 'worth' about £2500 today based on inflation, not £4500. £150 100y ago would be worth close to 12k now, so if you did hold onto the lease for 100 years it would balance out.

If you didn't have the 'stopping after 50y' clause the increases would go on to get so ridiculous as to be completely prohibitive, including surpassing the actual value of the property at some point.

I wouldn't worry about it.

Guest101

ThePants999 wrote: »

How is that relevant? We're talking ground rent, not a service charge. Any upkeep costs are presumably on top of this!

True, to be honest I thought it was an inclusive charge of both, if not apologies

Pete7

Surely it's £2400 in year 49 and stops at that if the lease says "up to 50 years". Then remains at £2400 for the remainder of the lease, although in 36 years the marriage value comes into play when the lease drops below 80 years remaining so ought to be renewed or extended by then.

0 -10 years = £150
10-20 years= £300
20-30 years= £600
30-40 years= £1200
40-50 years= £2400

Might be expensive to renew the lease if they can add the value of the doubling charge into the renewal.

What can you do about it, not much, sorry.

Pete