Am I trapped?

bouicca21

Yes, I am thinking that I should sort it out.  Just hate to get rid of so much money, especially as there has been talk of leasehold reform.  Though that’s unlikely to be a priority for a government struggling with Covid and Brexit.

NameUnavailable

bouicca21 said:

Yes, I am thinking that I should sort it out.  Just hate to get rid of so much money, especially as there has been talk of leasehold reform.  Though that’s unlikely to be a priority for a government struggling with Covid and Brexit.

How long is the lease now? If it's down to near 90 years or less then extending will also add value. Each year that ticks by the cost to extend goes up, hit below 80 years and it increases significantly as you have to pay the freeholder a share of the added market value that your extended lease will make. 

Londonseller

What really annoys me is that I raised the issue of the doubling ground rent to both my solicitor and mortgage advisor before purchasing. They both said that 25 year doubling ground rent is acceptable and would not be an issue when selling. I was unaware that lenders had already banned these clauses back then.  I honestly don't know what to do.

Vestraun

At 25 years you will most likely be fine. Even if one or two lenders are funny about it there are plenty more where it will be acceptable. I would be more worried about ESW1 than this. 

davidmcn

Vestraun said:

I would be more worried about ESW1

In a converted Victorian house?

Crashy_Time

If it`s in London can`t you just rent it out?

NameUnavailable

Just put it up for sale. It depends on the buyer and their lenders (if they have to get a mortgage) and may or may not be an issue.

getmore4less

bouicca21 said:

So now I’m worried too. My ground rent (flat in London) doubles every 30 years but is capped at £1,000.  Has it now become unmortgageable?

This is unlikely to be a problem for me unless the place has to be sold to pay for a care home, but it will obviously be a problem for my heirs.  I think it would cost about £10,000 to do a statutory extension and get rid of the ground rent altogether.  Not exactly cost effective since even if I were to live another 20 years (which is unlikely) I’d only be paying out a total of £5,000.  

What do those heirs think? would they chip in a bit to help out.

GDB2222

getmore4less said:

bouicca21 said:

So now I’m worried too. My ground rent (flat in London) doubles every 30 years but is capped at £1,000.  Has it now become unmortgageable?

This is unlikely to be a problem for me unless the place has to be sold to pay for a care home, but it will obviously be a problem for my heirs.  I think it would cost about £10,000 to do a statutory extension and get rid of the ground rent altogether.  Not exactly cost effective since even if I were to live another 20 years (which is unlikely) I’d only be paying out a total of £5,000.  

What do those heirs think? would they chip in a bit to help out.

Would you mind chipping in a bit to extend my lease, please? I’ll definitely remember you in my will. 

bouicca21

‘ Would you mind chipping in a bit to extend my lease, please? I’ll definitely remember you in my will. ’

LOL.  I have enough money to do it, just need to be sure it’s worth it.  The general idea is to leave as much as possible to my heirs, not to impoverish them.