Doubling ground rent

noddynoo

I was just wondering if ground rent is something that can be negotiated at the time of making an offer or if it is 'set in stone' I have seen a flat with a very long lease but it has a GR of £200 doubling every 25 years.Its not a problem for me as I would be buying with cash but I understand some mortgage co's aren't keen and it could affect resale. The lease will be 150 years brand new at completion so do you think it would be possible to make an offer with the condition they lower the GR? Or would it be better to wait 2 years and then do a statutory extension and eliminate it altogether?Thanks so much it is a bargain in a great area and no stairs which is vital for me for health reasons

cattie

You cannot usually negotiate ground rent on a lease, but as this is a new build you're talking about, you've got nothing to lose by trying to have a word with the developer, as long as they are the freeholder of the land. Don't discount the fact that you might possibly be able to aquire the freehold at some future point, together with other interested leaseholders.

If the flat is the bargain you mention, it's not going to hang around for long & it'll be snapped up, despite the terms of the lease.

noddynoo

It's not a new build

Tom99

noddynoo wrote: »

It's not a new build

Its if the lease is new. It does not matter how old the property is.
If the lease has not yet been granted then all terms in the lease are up for negotiation.
However if there are several flats all being sold on the same lease then the freeholder may well not want to sell one of them on different terms.

noddynoo

Oh ok I didn't know that Its the basement of an old house and upstairs is already occupied on a long lease. The one I am interested in will have a new lease at completion of 150 years it hasn't been granted yet and I was wondering about asking them to reduce the GR now rather than wait the 2 years and go down that road

Tom99

noddynoo wrote: »

Oh ok I didn't know that Its the basement of an old house and upstairs is already occupied on a long lease. The one I am interested in will have a new lease at completion of 150 years it hasn't been granted yet and I was wondering about asking them to reduce the GR now rather than wait the 2 years and go down that road

If you wait 2yrs under the current rules you may pay about say £5,000 to buy out the ground rent and extend the lease, plus both sides costs so say £7,000.
If you can negotiate a peppercorn rent now rather than a reduced ground rent then there is no need for any future lease extension incl both sides fees.
But if all you do is reduce the ground rent a bit you will still be stuck with both sides costs in 2yrs time.
However changes to the statutory process designed to make it simpler and cheaper for the tenant are in the pipeline. They may take some time to be introduced but by 2yrs time you should know what changes are proposed ie it may be cheaper to wait.

rachel230

Do not touch this with a bargepole.
See the facebook group -

National leasehold campaign
and also

https://petition.parliament.uk/petitions/238071

Research onerous ground rent scandals on line.

Steer well clear.
This is the latest scandal about to explode.

paddedjohn

rachel230 wrote: »

Do not touch this with a bargepole.
See the facebook group -

National leasehold campaign
and also

https://petition.parliament.uk/petitions/238071

Research onerous ground rent scandals on line.

Steer well clear.
This is the latest scandal about to explode.

Can't see any problem if it's only doubling every 25 years, even in 50 years time the ground rent will only be £800 which sounds like a bargain to me.

Keep_pedalling

rachel230 wrote: »

Do not touch this with a bargepole.
See the facebook group -

National leasehold campaign
and also

https://petition.parliament.uk/petitions/238071

Research onerous ground rent scandals on line.

Steer well clear.
This is the latest scandal about to explode.

Except in this case doubling every 25 years from a low base is not onerous, so this would be a foolish over reaction.

shortcrust

rachel230 wrote: »

Do not touch this with a bargepole.
See the facebook group -

National leasehold campaign
and also

https://petition.parliament.uk/petitions/238071

Research onerous ground rent scandals on line.

Steer well clear.
This is the latest scandal about to explode.

Eh?!

As others have pointed out, we're talking about the ground rent doubling every 25 years. That's around the same rate as current inflation, and well below historical levels.

I get really fed up with people advising people off leasehold houses. Around here there are leasehold houses as far as the eye can see and people have lived in them quite happily for generations. I suspect they don't consider themselves to be under the feudal yoke.

noddynoo

Tom99 wrote: »

If you wait 2yrs under the current rules you may pay about say £5,000 to buy out the ground rent and extend the lease, plus both sides costs so say £7,000.
If you can negotiate a peppercorn rent now rather than a reduced ground rent then there is no need for any future lease extension incl both sides fees.
But if all you do is reduce the ground rent a bit you will still be stuck with both sides costs in 2yrs time.
However changes to the statutory process designed to make it simpler and cheaper for the tenant are in the pipeline. They may take some time to be introduced but by 2yrs time you should know what changes are proposed ie it may be cheaper to wait.

Thank you Tom I did wonder about waiting for new legislation to see what that brings as the extension isn't urgent obviously!!