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  • FIRST POST
    • michaelsft
    • By michaelsft 17th May 19, 4:25 PM
    • 33Posts
    • 3Thanks
    michaelsft
    Solicitor unhappy with escalating ground rent - help!
    • #1
    • 17th May 19, 4:25 PM
    Solicitor unhappy with escalating ground rent - help! 17th May 19 at 4:25 PM
    Hi all, I'm in need of a little guidance and I hope some can offer some words of wisdom. Long story short, at a late stage in my purchase of a new flat (M21 - Chorlton) my solicitor has advised me to pull out on the basis that there is an escalating ground rent clause which goes:

    100 - first 25 years (10 years remaining at this stage)
    200 - 2nd 25 years
    400 - 3rd 25 years
    800 - 4th 25 years
    1600 - 5th 25 years

    Now, I don't think these prices themselves are outrageous but my solicitor has decided we must seek a deed of variation to get rid of this and that it'll cause many problems when selling in the future. She feels very strongly about it. My mortgage broker and estate agent don't seem particularly phased by the rate so I'm in a bit of a tiff. The sale has been going on for too long already and the buyer of my current flat is eager and willing to move at a moments notice.

    If I pull out of my sale I would still sell mine and rent somewhere while looking for somewhere else but that's a whole new level of annoyance. Storing things, paying rent, moving stuff twice. Obviously it would be easier to just go ahead with the current sale (much much easier) but I don't know who's advice to take - my solicitor or pretty much everyone else I have spoken to.

    All comments and advice are greatly appreciated.
    Thanks for reading
    Michael
    Debt free wannabee...
Page 3
    • anselld
    • By anselld 19th May 19, 8:44 AM
    • 6,323 Posts
    • 6,145 Thanks
    anselld
    The original statement was that a rent increase from 100pa to 200pa after 25yrs is equivalent to an inflation rate of 2.81%pa, which it is.
    What the capital value of the rent stream might me compared to a different review pattern has nothing to do with it.
    Originally posted by Tom99
    The original statement was "Doubling every 25 equates to an annual inflation of 2.8%."

    So I suspect everyone is correct depending on how they define "equates". Who said maths was an exact science?
    • GDB2222
    • By GDB2222 19th May 19, 8:54 AM
    • 15,238 Posts
    • 82,223 Thanks
    GDB2222
    I'd be less concerned if the GR were linked to inflation. There's no law that says we have to have positive inflation. Look at Japan for example which has had deflation. If that happened here the doubling every 25 years could become very onerous.
    No reliance should be placed on the above! Absolutely none, do you hear?
    • kerri gt
    • By kerri gt 19th May 19, 9:25 AM
    • 7,997 Posts
    • 53,483 Thanks
    kerri gt
    Hi all, I'm in need of a little guidance and I hope some can offer some words of wisdom. Long story short, at a late stage in my purchase of a new flat (M21 - Chorlton) my solicitor has advised me to pull out on the basis that there is an escalating ground rent clause which goes:

    100 - first 25 years (10 years remaining at this stage)
    200 - 2nd 25 years
    400 - 3rd 25 years
    800 - 4th 25 years
    1600 - 5th 25 years

    All comments and advice are greatly appreciated.
    Thanks for reading
    Michael
    Originally posted by michaelsft
    Is this paper annum of per month? I've seen both referred to in the thread. Per Annum doesn't seem an issue, per month and there may be concerns.
    Feb 2015 NSD Challenge 8/12
    JAN NSD 11/16


    • michaelsft
    • By michaelsft 19th May 19, 7:22 PM
    • 33 Posts
    • 3 Thanks
    michaelsft
    Is this paper annum of per month? I've seen both referred to in the thread. Per Annum doesn't seem an issue, per month and there may be concerns.
    Originally posted by kerri gt
    Per year. It's just the ground rent. The monthly management charge is just 64.64 a month - lower than most around here which seem to be about 100-130 month on average
    Debt free wannabee...
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