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  • FIRST POST
    • LaurenOD86
    • By LaurenOD86 14th Apr 18, 8:46 PM
    • 3Posts
    • 0Thanks
    LaurenOD86
    Ground rent doubling every 25 years
    • #1
    • 14th Apr 18, 8:46 PM
    Ground rent doubling every 25 years 14th Apr 18 at 8:46 PM
    Hi All,
    I am a first time buyer in the process of purchasing a leasehold flat. My solicitor has made me aware that there is a clause within the lease stating that the ground rent doubles every 25yrs. The ground rent is currently 150 per year and will be the case for the next 13 years before increasing to 300 for the next 25 years etc etc until it reaches a maximum of 2,400 per annum (which would kick in in 88 years time). My solicitor is duty bound to inform my lender of this and as such we are awaiting their reply, however having spoken to my solicitor he is confident that there will be no issue due to the amounts involved. I know this has been very much a hot topic over recent months and so I am now a little concerned as to whether I should continue with the purchase as I don't want to end up in a property that I cannot sell a bit further down the line. Given the amounts involved, could this be an issue for me? Majority of the press reports on this subject refer to cases where the ground rent doubles every 10 years?

    Any thoughts on this would be much appreciated!
Page 1
    • zx81
    • By zx81 14th Apr 18, 8:56 PM
    • 16,429 Posts
    • 17,486 Thanks
    zx81
    • #2
    • 14th Apr 18, 8:56 PM
    • #2
    • 14th Apr 18, 8:56 PM
    That sounds extremely good value.
    • anselld
    • By anselld 14th Apr 18, 9:58 PM
    • 5,626 Posts
    • 5,252 Thanks
    anselld
    • #3
    • 14th Apr 18, 9:58 PM
    • #3
    • 14th Apr 18, 9:58 PM
    Doubling every 25 years equates to 2.8% per annum. It isnt going to be a killer in real terms.
    • csgohan4
    • By csgohan4 14th Apr 18, 10:20 PM
    • 4,373 Posts
    • 2,735 Thanks
    csgohan4
    • #4
    • 14th Apr 18, 10:20 PM
    • #4
    • 14th Apr 18, 10:20 PM
    you may still find future buyers maybe put off by this, I loathe buying leasehold properties with anything that doubles on ground rent
    "It is prudent when shopping for something important, not to limit yourself to Pound land"
    • Slithery
    • By Slithery 14th Apr 18, 10:56 PM
    • 665 Posts
    • 1,030 Thanks
    Slithery
    • #5
    • 14th Apr 18, 10:56 PM
    • #5
    • 14th Apr 18, 10:56 PM
    Doubling every 25 years isn't an issue. It's the properties that double every 10 years that you need to watch out for.
    • da_rule
    • By da_rule 14th Apr 18, 10:59 PM
    • 2,572 Posts
    • 2,272 Thanks
    da_rule
    • #6
    • 14th Apr 18, 10:59 PM
    • #6
    • 14th Apr 18, 10:59 PM
    You could ask the seller (assuming they have been the leaseholder for at least 2 years) to serve a s.42 notice to extend the lease and then assign the notice to you.

    Extending the lease via the statutory route removes ground rent from the lease and adds an additional 90 years to the lease. The down side is you have to pay an additional premium to purchase the extension and cover the freeholders legal costs.
    • LaurenOD86
    • By LaurenOD86 15th Apr 18, 11:58 AM
    • 3 Posts
    • 0 Thanks
    LaurenOD86
    • #7
    • 15th Apr 18, 11:58 AM
    Ground rent doubling every 25 years
    • #7
    • 15th Apr 18, 11:58 AM
    Thanks all. So although there may be the odd wary buyer in the future you don't think it would put everybody off?
    • da_rule
    • By da_rule 15th Apr 18, 12:27 PM
    • 2,572 Posts
    • 2,272 Thanks
    da_rule
    • #8
    • 15th Apr 18, 12:27 PM
    • #8
    • 15th Apr 18, 12:27 PM
    Thanks all. So although there may be the odd wary buyer in the future you don't think it would put everybody off?
    Originally posted by LaurenOD86
    The length of the lease is probably more likely to put people off/make the property hard to mortgage than the ground rent, which is rising at a fairly reasonable average rate.
    • LaurenOD86
    • By LaurenOD86 15th Apr 18, 12:52 PM
    • 3 Posts
    • 0 Thanks
    LaurenOD86
    • #9
    • 15th Apr 18, 12:52 PM
    • #9
    • 15th Apr 18, 12:52 PM
    There is 113 years left on the lease, to be honest I only expect to live there 5 years tops.
    • zagubov
    • By zagubov 15th Apr 18, 11:55 PM
    • 15,243 Posts
    • 130,305 Thanks
    zagubov
    This doesn't sound like a particularly onerous ground rent, and I'm speaking as someone who regards such things as the work of the devil himself.
    There is no honour to be had in not knowing a thing that can be known - Danny Baker
    • cjdavies
    • By cjdavies 16th Apr 18, 7:55 AM
    • 3,230 Posts
    • 3,449 Thanks
    cjdavies
    It doesn't sound too bad when some landlords put up people's rent annually and will increase a lot more than the junp from 150 to 300 an extra annually.
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