Santander mortgage and ground rent clause

katemonkey

Hi all,

Another question on my property purchase which is still ongoing... 

We have obtained a deed of variation to the ground rent clause on leasehold flat I am purchasing. The new ground rent clause is now as follows:

125 year lease, 93 years left.
Current ground rent = £350p/a (currently 0.1% of property value)
Increases every 25 years either by doubling itself or by 0.1% of the property market value - whichever is greater.

This information has been submitted to Santander’s valuers for a decision. However, I am struggling to find any information on the exact criteria for Santander’s stance on ground rent. From what I see in the CML handbook, it simply says that the ground rent increase should not be “onerous”:

“Any onerous ground rent provisions should be reported to us. In particular, provisions which allow for ground rents to be increased over and above the Retail Price Index (or other inflation-linked index) are considered to be onerous and are unlikely to be acceptable to the Bank e.g. multipliers such as doubling after fixed periods of less than 25 years; or fixed increases which are clearly above inflation expectation.” 

Source: https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1852/

I am anxious to know whether the property will be accepted for the mortgage, and if not I will need to look for another lender. Does anyone have any clarity on whether the current ground rent is “onerous”? My solicitor seems to think it will be accepted, but waiting for a decision is making me doubt everything!