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Help to buy - Ground rent - Is it true?
mvb17
Posts: 5 Forumite
Hi there, I am looking around at new builds.
We are looking to purchase our first property, one of the developers said that with the new regulations released by the Government there shouldn't any ground rent on the new properties....Press release:Leaseholders freed from costly contract terms
However, I just contacted a developer who said this is a newbuild, and it converted an office block to accomodation, so we will be the first people in, but there is ground rent unless we purchase is with the help to buy scheme.
1. Does that mean that if we use the help to buy scheme - we don't get charged ground rent?
2. What is after 5 years we pay to help the buy scheme? - do we then get charged ground rent?
It's such a minefield buying property....
We are looking to purchase our first property, one of the developers said that with the new regulations released by the Government there shouldn't any ground rent on the new properties....Press release:Leaseholders freed from costly contract terms
However, I just contacted a developer who said this is a newbuild, and it converted an office block to accomodation, so we will be the first people in, but there is ground rent unless we purchase is with the help to buy scheme.
1. Does that mean that if we use the help to buy scheme - we don't get charged ground rent?
2. What is after 5 years we pay to help the buy scheme? - do we then get charged ground rent?
It's such a minefield buying property....
0
Comments
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Someone may correct me if I’m wrong, but I understood the “ban” of leasehold/ground rent on new builds applied only to houses… flats (which I assume this is based on your description) will always be leasehold (hence subject to ground rent and service charge) due to the need to formally organise communal repairs/maintenance etc...
I’ve never heard of HTB being a factor in whether you do or don’t pay ground rent, HTB is just the method of financing the property, it’s completely independent of the lease…0 -
Sounds about right, a HTB new-build with unknown future ground rent is the last thing you want to buy in this climate.0
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Some developers have agreed to removed doubling ground rent clauses from their lease terms, but ground rent may still be payable.You need to confirm the details of the lease you will be buying - length of term, ground rent (and if it increases, by what amount) and service charges.I would be particularly careful buying in a converted office block - read about EWS1 and also PAS9980 which will be coming in soon with regards to building fire safety. Don't think that just because it's a new development that they will have ensured it meets the required standards, and if in 12 months time they decide £300K or extra work is required, guess who will have to pay for it!1
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