Ground Rent Increase

Ashspider

My mother lives in a flat where the ground rent has been £137 for the last 6 years.She has recently received a letter from Premier Estates asking for an Extra £70 as an increase. Is an increase like this allowed. See below re their wording.Do I need to check anything? Can you appeal?

Your lease of the above-mentioned property provides for the ground rent payable to be reviewed with effect from 1st August 2024. The review could not be calculated until the publication of the figure for the value of the Retail Price Index (all items) (“the Index”) for June 2024. The review calculation specified in the Eleventh Schedule of your lease is the original ground rent (i.e. £100.00) x (A/B). Where “A” is the most recently published value of the Index (i.e. June 2024) and “B” is the value of the Index last compiled before August 2004 (i.e. June 2004). According to information published by the Office for National Statistics the value of the Index in June 2024 was 387.3 and the value of the Index in June 2004 was 186.8. Therefore, the annual ground rent that is payable under your lease from 1st August 2024 to 31st July 2034 has been calculated as follows: £100.00 x (387.3/186.8) = £207.33. Please find enclosed an invoice for £70.12 representing the difference between the amount invoiced on 1st August 2024 (£137.21) and the new amount. Please note that the new amount payable until the next review on 1st August 2034 will be £207.33 per annum.

Any advice appreciated

Ayr_Rage

Looks completely fine to me.

It is fixed for the next 10 years which seems pretty fair.

If that is what the lease says then there is no right of appeal as your mother has signed that agreement.

saajan_12

Ashspider said:

My mother lives in a flat where the ground rent has been £137 for the last 6 years.She has recently received a letter from Premier Estates asking for an Extra £70 as an increase. Is an increase like this allowed. See below re their wording.Do I need to check anything? Can you appeal?

Your lease of the above-mentioned property provides for the ground rent payable to be reviewed with effect from 1st August 2024. The review could not be calculated until the publication of the figure for the value of the Retail Price Index (all items) (“the Index”) for June 2024. The review calculation specified in the Eleventh Schedule of your lease is the original ground rent (i.e. £100.00) x (A/B). Where “A” is the most recently published value of the Index (i.e. June 2024) and “B” is the value of the Index last compiled before August 2004 (i.e. June 2004). According to information published by the Office for National Statistics the value of the Index in June 2024 was 387.3 and the value of the Index in June 2004 was 186.8. Therefore, the annual ground rent that is payable under your lease from 1st August 2024 to 31st July 2034 has been calculated as follows: £100.00 x (387.3/186.8) = £207.33. Please find enclosed an invoice for £70.12 representing the difference between the amount invoiced on 1st August 2024 (£137.21) and the new amount. Please note that the new amount payable until the next review on 1st August 2034 will be £207.33 per annum.

Any advice appreciated

Its allowed if the lease says its allowed. Does it? 

Its describing an RPI based ground rent, which only updates every 10 years. The relevant RPIs (starting in 1987) were 
June 2004 = 186.8 -> £100
June 2014 = 256.3 ie 37.2% increase -> £137.21
June 2024 = 387.3 ie 51.1% increase -> £207.33

BarelySentientAI

Ground rent that gets reviewed every ten years based on an equation specified in the lease.  Yes it's allowed.

If you want to check anything, check that the lease actually does say this and/or the index and calculation.  I suspect that it's entirely correct though.

DullGreyGuy

Ashspider said:

My mother lives in a flat where the ground rent has been £137 for the last 6 years.She has recently received a letter from Premier Estates asking for an Extra £70 as an increase. Is an increase like this allowed. See below re their wording.Do I need to check anything? Can you appeal?

You need to check the lease, it will state how the ground rent will escalate. You cannot appeal, you agreed to it when you agreed to become the leaseholder, your decision to become the leaseholder or not should have considered the escalation mechanism of the ground rent. 

It's a moot point because you have already signed up to this methodology but there is a wide range out there. Ours is £200/year and doubles every 25 years.