Escalating ground rent nightmare

ekj

Hi

I'm looking for  some help.  My  partner  is  trying  to  sell a flat he  bought  4 years  ago.  It was  newly built when purchased.  He has  been  advised  when  putting the  property on  the  market by estate  agents that virtually  all  mortgage  lenders  will not  lend  money  due  to  the  ground  rent  increasing.  Which  will  make  it  difficult to sell! We  have instructed a  solicitor  to complete a  deed  of variation  in  March and  have  yet  to have  any response  from  the freeholder.  When we  have  approached the freeholder  they have  told  us  that  they  are under  no  obligation to complete a deed  of variation.   It  does feel  like  we are trapped  with  the  property now.  He  was  never  clearly  told  this  would  be  an  issue  when  first purchasing  the  property.  I'd be grateful if  anyone can  suggest a way of taking  this  further.  It feels very unfair they are preventing us  from moving  home by refusing  to allow  a  deed  of  variation on  the  lease.  Other properties  in  the  building  have had this  agreed  previously.

Slithery

Advertise the property for cash buyers only?

rachel230

Join the National Leasehold Campaign Facebook group where you will get advice/support. Many others are/have been in the same situation. You may well find others there with the same freeholder and will share how they are dealing with it.
https://m.facebook.com/groups/nationalleaseholdcampaign/?ref=group_header&view=group

Wanderingpomm

You might have to auction it. 

It’s almost criminal your conveyancers weren’t on the ball when he bought it, I assume developers recommended them? 

withaspritz

What are the terms of the ground rent escalation? A 25 year doubling clause is acceptable to most banks (specifics here https://www.cml.org.uk/lenders-handbook/englandandwales/question-list/1852/) for example, however if the ground rent goes above £251 it would become an assured shorthold tenancy (assuming outside London) and thus require the seller to likely purchase an indemnity policy.

anselld

He will need to either negotiate a fee to persuade the Freeholder to sign the variation or do a statutory lease extension which will delete the ground rent.  Either way it will be expensive.
Or auction/ cash buyer as others have said.

AdrianC

ekj said:

He has been  advised  when  putting the  property on  the  market by estate  agents that virtually  all  mortgage  lenders  will not  lend  money  due  to  the  ground  rent  increasing.

What is the increase schedule?

When we  have  approached the freeholder  they have  told  us  that  they  are under  no  obligation to complete a deed  of variation.

That's true, they aren't. The lease that he agreed to on purchase is legally binding on both sides.

Let me guess... He used the developer's "recommended" solicitor when purchasing?
When did he purchase?
This has been in the news since 2016...
https://www.theguardian.com/money/2016/nov/05/ground-rent-scandal-engulfing-new-home-buyers-leasehold

RelievedSheff

It depends on the terms of the lease as to whether lenders will lend on the property or not.