Can't sell due to high ground rent charges

System

This discussion was created from comments split from: Selling problem due to ground rent.

[Deleted User]

I have two 20yr old apartments for sale in a nice part of Birmingham in a well managed, quiet close. I've had them from new and they are both very large flats and I've had them decorated and new carpets and flooring put down, so in excellent condition but I have lost five sales in as many months due to high ground rent charges. Either the buyers solicitor advises buyers to look for another property or they cannot find a lender. My ground rent has a RPI review every 10 years. It went up from £280 to £410 per year in 2023. Neither Estate agents, or conveyancers or solicitors seem to know how to handle these cases. I have had to do my own research and I have paid for indemnity insurance polices on both and still the lenders won't lend. The head lease holder will not hear of a Deed of Variation - which will anyway take months and cost loads so I will not get my money back. I am devastated. 

Tiglet2

[Deleted User] said:

I have two 20yr old apartments for sale in a nice part of Birmingham in a well managed, quiet close. I've had them from new and they are both very large flats and I've had them decorated and new carpets and flooring put down, so in excellent condition but I have lost five sales in as many months due to high ground rent charges. Either the buyers solicitor advises buyers to look for another property or they cannot find a lender. My ground rent has a RPI review every 10 years. It went up from £280 to £410 per year in 2023. Neither Estate agents, or conveyancers or solicitors seem to know how to handle these cases. I have had to do my own research and I have paid for indemnity insurance polices on both and still the lenders won't lend. The head lease holder will not hear of a Deed of Variation - which will anyway take months and cost loads so I will not get my money back. I am devastated. 

I think the only way round this problem is for you to do a statutory lease extension on both apartments which will reduce the ground rent to a peppercorn and add a minimum of 90 years to the term.  It will cost a few thousand but will mean your apartments are saleable.

The Leasehold Reform Act 2022 means that any new leases (i.e. new build apartments) have no ground rent (or peppercorn), so are more appealing to buyers.

Did you use the developer's 'recommended' solicitor to purchase the apartments?

user1977

The "over £250 means it's an assured tenancy" glitch (if that's part of the problem) is about to be repealed by the Renters Rights Bill going through Parliament. So technically still a risk but in reality it won't be by the time anybody tried to take advantage of it.

eddddy

[Deleted User] said:

My ground rent has a RPI review every 10 years. It went up from £280 to £410 per year in 2023. 

As previously mentioned, you could do a Statutory Lease Extension which would add 90 years to the lease, and reduce your ground rent to zero.

But assuming you have a 'longish' lease (over 100 years), that might cost £20k to £28k per flat - plus fees which might be about £5k per flat.

And it might take between 6 months and 18 months to complete.

Perhaps 6 months if you have a friendly, cooperative freeholder.  But a less friendly freeholder might purposely stretch things out - maybe with an implication that "if you agree to pay me over the odds, I'll speed up, and then you can sell more quickly. If you won't pay over the odds, I'll go as slowly as I can."

saajan_12

[Deleted User] said:

I have two 20yr old apartments for sale in a nice part of Birmingham in a well managed, quiet close. I've had them from new and they are both very large flats and I've had them decorated and new carpets and flooring put down, so in excellent condition but I have lost five sales in as many months due to high ground rent charges. Either the buyers solicitor advises buyers to look for another property or they cannot find a lender. My ground rent has a RPI review every 10 years. It went up from £280 to £410 per year in 2023. Neither Estate agents, or conveyancers or solicitors seem to know how to handle these cases. I have had to do my own research and I have paid for indemnity insurance polices on both and still the lenders won't lend. The head lease holder will not hear of a Deed of Variation - which will anyway take months and cost loads so I will not get my money back. I am devastated. 

please stick to one thread, and preferably one of your own rather than adding to other old threads. responders will just be split between responding ot the OP and you. 

System

This discussion was created from comments split from: Ground rent increasing with RPI every 10 years? What do I do?.

MSE_ForumTeam5

We've combined a number of posts into this thread

ReadySteadyPop

[Deleted User] said:

I have two 20yr old apartments for sale in a nice part of Birmingham in a well managed, quiet close. I've had them from new and they are both very large flats and I've had them decorated and new carpets and flooring put down, so in excellent condition but I have lost five sales in as many months due to high ground rent charges. Either the buyers solicitor advises buyers to look for another property or they cannot find a lender. My ground rent has a RPI review every 10 years. It went up from £280 to £410 per year in 2023. Neither Estate agents, or conveyancers or solicitors seem to know how to handle these cases. I have had to do my own research and I have paid for indemnity insurance polices on both and still the lenders won't lend. The head lease holder will not hear of a Deed of Variation - which will anyway take months and cost loads so I will not get my money back. I am devastated. 

Did you buy these flats as an investment?

theartfullodger

You can all sell.  But not for the high price you want 

As Thatcher (not a fan) said, you can't beat the market.

Best wishes to all.

ReadySteadyPop

theartfullodger said:

You can all sell.  But not for the high price you want 

As Thatcher (not a fan) said, you can't beat the market.

Best wishes to all.

Very true.