Selling Leasehold Property

blue_max_3

How do you know it's a requirement of the lender? I was under the impression that it has been causing problems with lenders. And you might find yourself facing this issue from any subsequent buyers.
If you feel you got a good price after negotiations, it may be worth considering splitting the difference (including legal fees). 

AdrianC

GDB2222 said:

AdrianC said:

If they change from 30yr-doubling to anything inflationary, especially if it brings in annual increases, they'll find themselves paying a LOT more.

30 year doubling is equivalent to 2.3%pa increases. Who knows what the inflation rate will be over that period?

Are you considering just the final figure, or the total paid?

GDB2222

Just the final figure. I was thinking that, if the ground rent increased at a regular 2% pa or so, nobody would care. But doubling sounds a lot scarier, whilst the effect is much the same.

AdrianC

GDB2222 said:

Just the final figure.

But if that inflationary increase is applied any more frequently than every 30yrs, then the total paid is MUCH higher...
Two minutes with a spreadsheet comes up with the figures...
Annual 2.3% increases will see the annual figure up from £150 to £296.73 by 2050, when the 30yr-double goes from £150 to £200... but with a total paid of £6,676.26 rather than £4,800...

To get the same total paid, the annual increment would need to be just 0.21%... (£4,799.49 total)

I was thinking that, if the ground rent increased at a regular 2% pa or so, nobody would care. But doubling sounds a lot scarier, whilst the effect is much the same.

Yup.
Double-every-10 is usurious and nobody will lend against it.

People get hung up on "But DOUBLE!" and fail to realise that Double-every-25 (or, as here, even less frequently) is a bit of a bargain.

GDB2222

You are obviously right, although I have not checked your numbers. It depends on the length of the lease how the figures work out. Also in the OP's case The first increase is after 20 years IIRC. 

ekumi00

blue_max_3 said:

How do you know it's a requirement of the lender? I was under the impression that it has been causing problems with lenders. And you might find yourself facing this issue from any subsequent buyers.
If you feel you got a good price after negotiations, it may be worth considering splitting the difference (including legal fees). 

I know is not a requirement because there mortgage is with Natwest and the cml from Natwest in relation to ground rent says:

"N.B. if the ground rent exceeds £250 per annum (£1000 per annum for London properties) you must confirm that the terms of the lease in relation to the ground rent are acceptable. We can then approach the valuer to confirm whether the cost of the ground rent would affect property suitability and marketability." It's definitely worth putting to them about splitting these costs. If they're not happy then I think I'll find new buyers.

ekumi00

GDB2222 said:

If a lot of the flats locally have the doubling ground rent, then you can argue that it’s reflected in local prices.

Incidentally, it’s interesting that there’s been a lot of interest in your flat. Does it have access to outdoors space? That seems to be an important factor these days.

It has a communal garden and surrounded by greenery. Has a French balcony so it's not your typical high rise London block. I'll see what they're solicitor comes back with and maybe go back to market.