PLEASE READ BEFORE POSTING

Hello Forumites! In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non-MoneySaving matters are not permitted per the Forum rules. While we understand that mentioning house prices may sometimes be relevant to a user's specific MoneySaving situation, we ask that you please avoid veering into broad, general debates about the market, the economy and politics, as these can unfortunately lead to abusive or hateful behaviour. Threads that are found to have derailed into wider discussions may be removed. Users who repeatedly disregard this may have their Forum account banned. Please also avoid posting personally identifiable information, including links to your own online property listing which may reveal your address. Thank you for your understanding.

999 year lease

Prairie
Prairie Posts: 6 Forumite
edited 29 June 2017 at 11:39PM in House buying, renting & selling
Hello,

Grateful for advice / opinions on this situation please.

I'm thinking of buying a flat. However I've discovered that:

Lease is 999 years

2030: £450
2050: £900
2070: £1800
2090: £3600
2110: £7200. :eek: Ground rent remains at £7200 for the remainder of the lease.

The last 3 increases in particular look scary and I'm very unsure now about whether to go ahead with the purchase. I really like the flat however I'm ​concerned about the ability to resell several years down the line (flat fits my foreseeable needs now but if I had kids in the future it would be too small, and likewise if anything unforeseen happened and I had to sell). The issue of ground rent is now much more publicised and I'm thinking possibly this will increase some years down the line making it harder to sell.:undecided:
«1

Comments

  • -taff
    -taff Posts: 14,494 Forumite
    First Anniversary Name Dropper Photogenic First Post
    Are going to live for 999 years? Or for near enough 100?
    Shampoo? No thanks, I'll have real poo...
  • kingstreet
    kingstreet Posts: 38,760 Forumite
    First Anniversary Name Dropper Photogenic First Post
    What's £225 going to be worth in 2110 assuming inflation runs at 3% per annum?
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
  • Chanes
    Chanes Posts: 882 Forumite
    First Anniversary First Post Combo Breaker
    I've read some mortgage lenders will not lend money if there is a doubling clause on the ground rent, you could check out further with the Leasehold campaign on Facebook.
  • anselld
    anselld Posts: 8,279 Forumite
    Name Dropper First Post First Anniversary
    Doubling every 20 equates to 3.5% per annum. Not really punitive.
    Lenders do not object to doubling as such, it depends how often.
  • PasturesNew
    PasturesNew Posts: 70,698 Forumite
    Name Dropper Photogenic First Anniversary First Post
    In 2110 just start a JustGiving page :)
  • eddddy
    eddddy Posts: 16,431 Forumite
    First Anniversary First Post Name Dropper
    I guess it depends on if/how people's attitudes to ground rent evolves over time.

    As more flats get Statutory Lease Extensions or Shares of Freehold - meaning zero ground rent - flats with high rising ground rents may be frowned upon, and become harder to sell.

    Or maybe they won't be!
  • csgohan4
    csgohan4 Posts: 10,587 Forumite
    First Anniversary First Post Name Dropper Photogenic
    walk away, ground rent is a disaster waiting to happen. You may find it difficult to sell your house with the clauses
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • Prairie
    Prairie Posts: 6 Forumite
    edited 17 June 2017 at 1:35PM
    -taff wrote: »
    Are going to live for 999 years? Or for near enough 100?

    I thought that way initially too but people think more long term now with resaleability in mind, otherwise those ground rent terms which double every 10 years wouldn't be such an issue. :undecided

    My other worry is lenders changing their criteria. I know Nationwide has recently changed theirs to not lending on new builds with onerous ground rent terms (this flat is not affected by the criteria change but I do wonder if other lenders in the future could place blanket bans on any doubling clauses)
  • ceecee1
    ceecee1 Posts: 409 Forumite
    Check out the Leasehold Knowledge Partnership website and/or the National Leasehold page on Facebook.

    Nationwide have announced that they will not lend on doubling ground rents OR those whose original amount is over 0.1% of the property value. I don't suppose that will affect the London market !

    I believe that 2 of the big banks will also not lend on these properties so you may find that you need to shop around for a mortgage.

    If it is a Taylor Wimpey property and you will not be the original purchaser you will not be able to benefit from their ground rent assistance scheme which they will not release details of but is widely thought that leases will change from doubling to increasing in line with RPI
  • anselld
    anselld Posts: 8,279 Forumite
    Name Dropper First Post First Anniversary
    ceecee1 wrote: »
    widely thought that leases will change from doubling to increasing in line with RPI

    Doubling every 20 years equates to 3.5% pa.
    RPI currently stands at 3.7% pa.
    Impossible to say which will be financially better in the long run despite the current hysteria over doubling ground rents.
This discussion has been closed.
★ ★ ★ Meet your Ambassadors

Categories

  • All Categories
  • 343.2K Banking & Borrowing
  • 250.1K Reduce Debt & Boost Income
  • 449.7K Spending & Discounts
  • 235.2K Work, Benefits & Business
  • 608K Mortgages, Homes & Bills
  • 173K Life & Family
  • 247.9K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 15.9K Discuss & Feedback
  • 15.1K Coronavirus Support Boards