Ground rent doubling every 25 years

LaurenOD86

Hi All,
I am a first time buyer in the process of purchasing a leasehold flat. My solicitor has made me aware that there is a clause within the lease stating that the ground rent doubles every 25yrs. The ground rent is currently £150 per year and will be the case for the next 13 years before increasing to £300 for the next 25 years etc etc until it reaches a maximum of £2,400 per annum (which would kick in in 88 years time). My solicitor is duty bound to inform my lender of this and as such we are awaiting their reply, however having spoken to my solicitor he is confident that there will be no issue due to the amounts involved. I know this has been very much a hot topic over recent months and so I am now a little concerned as to whether I should continue with the purchase as I don't want to end up in a property that I cannot sell a bit further down the line. Given the amounts involved, could this be an issue for me? Majority of the press reports on this subject refer to cases where the ground rent doubles every 10 years?

Any thoughts on this would be much appreciated!

[Deleted User]

That sounds extremely good value.

anselld

Doubling every 25 years equates to 2.8% per annum. It isnt going to be a killer in real terms.

csgohan4

you may still find future buyers maybe put off by this, I loathe buying leasehold properties with anything that doubles on ground rent

Slithery

Doubling every 25 years isn't an issue. It's the properties that double every 10 years that you need to watch out for.

da_rule

You could ask the seller (assuming they have been the leaseholder for at least 2 years) to serve a s.42 notice to extend the lease and then assign the notice to you.

Extending the lease via the statutory route removes ground rent from the lease and adds an additional 90 years to the lease. The down side is you have to pay an additional premium to purchase the extension and cover the freeholders legal costs.

LaurenOD86

Thanks all. So although there may be the odd wary buyer in the future you don't think it would put everybody off?

da_rule

LaurenOD86 wrote: »

Thanks all. So although there may be the odd wary buyer in the future you don't think it would put everybody off?

The length of the lease is probably more likely to put people off/make the property hard to mortgage than the ground rent, which is rising at a fairly reasonable average rate.

LaurenOD86

There is 113 years left on the lease, to be honest I only expect to live there 5 years tops.

zagubov

This doesn't sound like a particularly onerous ground rent, and I'm speaking as someone who regards such things as the work of the devil himself.

Marvel1

It doesn't sound too bad when some landlords put up people's rent annually and will increase a lot more than the junp from £150 to £300 an extra annually.