Deed of variation rip off

simonpawlin

I wanted to share my experience and seek advice.

I own a leasehold flat in Farnborough, Hampshire. My ground rent is £222.45 per year, reviewed every 10 years with RPI. When I tried to sell, my buyer’s lender refused to lend because, under the Housing Act 1988, ground rents over £250 outside London can technically turn a lease into an assured tenancy — even though the rent is small.

My solicitor asked the freeholder, Avon Estates Ltd, for a simple Deed of Variation to cap the rent and add a rent-suspension clause. Avon demanded £21,000 plus legal fees for this. Multiple conveyancers and valuers I’ve spoken to say such variations normally cost £750–£1,000 in total.

I even offered £6,000 as a generous compromise, but Avon have now refused to consider any variation at all. They haven’t even replied to my formal complaint. As a result, my sale has collapsed and I’ve had to take my flat off the market.

This process has been a nightmare — financially and emotionally. 

I’ve written to my MP, Leo Docherty, and the Minister for Housing, asking for urgent reform of the £250 ground-rent rule and for freeholders to be required to act reasonably.

Has anyone else experienced something similar with Avon Estates or other freeholders? And did anyone successfully challenge such fees through the First-tier Tribunal?

Any advice or shared experiences would be hugely appreciated.

user1977

simonpawlin said:

I’ve written to my MP, Leo Docherty, and the Minister for Housing, asking for urgent reform of the £250 ground-rent rule .

It's already been reformed! It's part of the Renters Rights Act and this part comes into force on 27 December. Didn't the solicitors know?

GDB2222

https://www.kuits.com/renters-rights-act-2025-long-leasehold-reform/

About time this anomaly was dealt with.

flaneurs_lobster

There's only one Avon Estates Ltd listed and it's in the mobile homes business in the Midlands.

Different company?

eddddy

simonpawlin said:

My solicitor asked the freeholder, Avon Estates Ltd, for a simple Deed of Variation to cap the rent and add a rent-suspension clause. Avon demanded £21,000 plus legal fees for this. Multiple conveyancers and valuers I’ve spoken to say such variations normally cost £750–£1,000 in total.

FWIW - it sounds like you're confusing two completely different things...

• 1) The cost of drafting a Deed of Variation (i.e. In simple terms, the fee you have to pay a conveyancer for writing a page of A4 paper) - that  might be £750 to £1000

• 2) The compensation you have to pay your freeholder for loss of future ground rent - and your freeholder is asking for £21k compensation

You would have to pay both of those costs. (But to be honest, £21k does sound on the high side for compensation. But it depends on the details.)




Regarding the compensation...

• it would be a big chunk of money because when you bought the flat, you agreed to pay your freeholder ground rent that increased with RPI for the next 100 or 200 years or whatever the length of lease.

• Now it sounds like you want to go back on what you agreed and only pay £250 ground rent for the next 100 or 200 years or whatever.

As a rough illustration...

Based on past RPI, without the Deed of Variation you might have to pay ground rent something like this:

• After 10 years: £330 per year
• After 20 years: £480 per year
• After 50 years: £1600 per year
• After 100 years: £11,200 per year

But with the Deed of Variation you'd pay ground rent like this:

• After 10 years: £250 per year
• After 20 years: £250 per year
• After 50 years: £250 per year
• After 100 years: £250 per year

So you can probably see why the freeholder would want compensation for loss of future ground rent - but as I say, £21k sounds excessive.