Selling my Flat - Ground Rent Help!

Chubbee97

Hello,

I am trying to sell my flat and currently have a buyer after one fell through.

I have an issue where my ground rent is £450 per year and the value of the flat is in the area of £190k

Buyers are unable to get a mortgage as providers deem this to much of a risk. I am looking down the line of a deed of variation but the leaseholders want £14k + legal fees.

Is there anything i can do other than pay the £14k? I need to sell the property quite quick as i need space for our new born child?

Any help would be appreciated. 

eddddy

• How many years are left on your lease?
• Is the ground rent fixed at £450 for the rest of the lease - or does it increase?
• Will the Deed of Variation reduce your ground rent to £0 for the rest of the lease?

Unless the lease is short and/or the ground rent increases, £14k sounds a bit expensive. They might see it as a starting point for negotiation.

(FWIW, the Government formula used for lease extensions suggest the cost of this Deed of Variation should be around £6.5k to £7.5k)

So depending on the answers to the questions above, doing a 'Statutory Lease Extension' is likely to be cheaper. That would reduce your ground rent to £0.

But... a Statutory Lease Extension typically takes 6 to 18 months to complete.  And the legal fees etc are likely to be higher.


Does the freeholder know that you're selling and you 'urgently' need the Deed of Variation? If so, that might be why they're taking a punt, and asking for a high price.


You can try negotiating - which might (or might not) involve a bit of bluffing. For example, saying to the freeholder:

"The buyer and I can cover a Deed of Variation cost of £8k plus reasonable fees, but we can't go any further than that.

If you won't accept that we'll have to take the property off the market, and do a Statutory Lease Extension instead - which we believe is likely to cost around £8k to £9k.

We might wait until the Leasehold and Freehold Reform Act 2024 is enacted, which should make the Lease Extension or Deed of Variation cheaper"


It sounds like the freeholder is taking a bit of a punt, so I guess it's fair if you try the same kind of tricks.

gwynlas

If this is your first child there is no need to rush a sale it is only in very recent times that most people have had the luxury of giving baby their own room. Given that the majority of family houses only have three bedrooms if you have more than two children they will inevitabliy share