RPI or doubling ground rent?

Vikiti

I am a very confused flat owner with a ground rent issue, I'm hoping someone can help me out with it!

I have owned my property for 8 years and have paid a Ground Rent of £200 every year in that time. As a flat, I know its Leasehold and as a block, we have never attempted to buy the freehold.

I have recently received a letter from Taylor Wimpey (the builders of my flat) to tell me that they will pay some of my legal fees if I want to move to RPI ground rent.

Having looked into RPI, it doesn't seem to make the situation much better?! It also seems to remove many of the rights I may have if I choose to contest the leasehold terms later on.

I'm just pretty confused as to what I should opt for. Taylor Wimpey must know they're in the wrong if they're offering this "deal", so would I be better to stick with my current GR situation, or move across to RPI?

Apologies if this has been answered before! I am just not sure where to turn!

Thanks in advance for an advice, it will be greatly appreciated!

penners324

RPI increase will make the ground rent £103.50 per year for 10 years, then £107 per year for year....

A lot of mortgage companies are now refusing to loan on leasehold flats with doubling rent clauses. Making your flat unsellable.

I'm going through this now, almost completed in fact.
It's cost about £1600 in total but worth it if I can sell on.

Tom99

Vikiti wrote: »

I am a very confused flat owner with a ground rent issue, I'm hoping someone can help me out with it!

I have owned my property for 8 years and have paid a Ground Rent of £200 every year in that time. As a flat, I know its Leasehold and as a block, we have never attempted to buy the freehold.

I have recently received a letter from Taylor Wimpey (the builders of my flat) to tell me that they will pay some of my legal fees if I want to move to RPI ground rent.

Having looked into RPI, it doesn't seem to make the situation much better?! It also seems to remove many of the rights I may have if I choose to contest the leasehold terms later on.

I'm just pretty confused as to what I should opt for. Taylor Wimpey must know they're in the wrong if they're offering this "deal", so would I be better to stick with my current GR situation, or move across to RPI?

Apologies if this has been answered before! I am just not sure where to turn!

Thanks in advance for an advice, it will be greatly appreciated!

How frequently does the existing ground rent double and when is the next review?

AdrianC

Doubling frequency is key.

Just put the numbers into a spreadsheet... Obviously, you're guessing for future inflation - but try it with numbers from 1-3%. Remember, the number you're interested in is the total of all the annual figures, not just the annual figures themselves.

If you're on 10yr doubling, you'll be quids-in moving. If you're on 25yr doubling, it's a much closer call.

eddddy

It sounds like Taylor Wimpey's 'Ground Rent Review Assistance Scheme' - which is only available to leaseholders whose ground rent doubles every 10 years (unless TW have expanded it).


However, this TW leaseholder says her current lease doubles ground rent every 10 years for 50 years only, whereas the new lease would increase by RPI for 250 years (i.e. the full life of the lease) :

https://www.leaseholdknowledge.com/taylor-wimpeys-snake-oil-ground-rent-review-scheme-makes-toxic-leases-even-worse

FWIW, I'm not sure I agree with the analysis in that article - it doesn't seem to apply a discount rate to future cash flows.

The article also mentions the possibility of 10 yearly doubling ground rents being declared unfair contract terms and therefore being made illegal in existing leases.

See also: https://www.lease-advice.org/news-item/competition-markets-authority-launches-consumer-law-investigation-into-leasehold-market/

But TBH, I think I'd be tempted to take up the RPI offer.

rachel230

Lots on here with the same issue.

https://nationalleaseholdcampaign.org

Vikiti

It doubles after 10 years, so I'm fast approaching this time!

eddddy

Vikiti wrote: »

It doubles after 10 years, so I'm fast approaching this time!

And more importantly, what does it do after that?

• Does the ground rent continue to double every 10 years?
• Is it every 10 years for 50 years? Or every 10 years for the full term of the lease?
• How long is the lease?

And what about the new RPI offer?

• Would the ground rent continue to increase by RPI for the full term of the lease? Or for some other period?

turning

Hi
I would appreciate some advise here, as a FTB trying to buy a leasehold SO flat in London, and the Housing association has suggested the following:

Before staircaising to 100% they will abide to whatever the lender wants in terms of how often they will review the GR (and we know most lenders these days cap the increases, after the scandal)

The problem is that my lease would say that after staircasing to 100%, the GR will be reviewed every year, and increased 100 pounds. ( I understand this is an increase of 8 pounds per month, every year)

I think this is excessive, and I am not sure how to negotiate this.
What figure would be reasonable to have as an annual increase?

Will this be ever capped by the government?
Do you think Is it reasonable to request that they amend the lease to make sure they will abide retrospectively to this if the law changes in the future?

Obviously I need to discuss this more in detail with my solicitor but I just thought I´d get some advise here from your experiences!

Thanks so much in advance!

AdrianC

The Ground Rent will increase by a flat £100/yr? No scope for that £100 figure itself ever increasing?

How much is that as a %age of the current figure?

There's no need to change the lease to say "We'll obey the law in future". It'd be illegal for them not to. That's kinda the whole point of a law change.