Worrying for no reason? - Ground Rent

steve_jones

Hi All,

I'm in the process of selling my apartment which I bought 5 years ago, its been a great home for me but now its time to move on. My apartment is very reasonable price, less than 100k, its sold at a good price as I wanted to move fast. A few apartments have sold in this block in the past 5 years and they all sell well.

The ground rent on my apartment is £250pa, however it increases £250 every 10 years. So:
£250 next 5 years
£500 for 10 years
£750 10 years
£1000 10 years
£1250 10 years
£1500 remaining term.

I have heard horror stories online of some peoples ground rent doubling which is incredible. that means if mine was on that rate it would be at £8000 for the remaining term, shocking.

I am still worrying a bit about my ground rent lease, is it likely a mortgage could be rejected cause of this? As I said before all have sold in this apartment block within 3 months so I can't see it being an issue but looking for some more advice to be sure.

strawberries1

Following this.

LEJC

I think potential purchasers will make their decision....

Personally I think its high but it depends what other management charges are also associated with the complex.

It also depends if thats a general theme that runs through ground rent in the area.

I've got 4 properties where ground rent is a factor....one is zero,2 are £50 per year and the 4th £100 per year...hence me suggesting I would avoid your situation

The figures look large but perhaps when factored into actual costs of living in 10 years plus may still be reasonable

other factors which could be important is for example the length of the lease remaining.....until a purchaser knows the full picture of costs going forward its difficult to make a decision based on one factor.

HouseBuyer77

Well mortgage lenders all have their own criteria but yours is not a doubling every 10 years lease (which many lenders do reject) so you will hopefully be ok (other properties with the same terms selling gives you confidence here).

Another way to look at your ground rent terms is the amount it increase by is actually less every time. You increase by a fixed value £250. That £250 will be worth less each time due to inflation, so in that sense it's quite a friendly increase compared to others you see.