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Found 14 results

  1. Hi I've just been getting organised with property bills and notice that I have never paid ground rent on a new build flat that was completed in 2019. Ground rent should be £200 per year, according to the lease. I just checked with the property management company and they told me that the freeholder (a developer) has gone bust and suggested I contact the administrator. Has this happened to anyone else? It's on the King Edward Court development which was a Property Hub one.
  2. I purchased a property through RMP back in 2015 and recently had an “Offer to vary Ground Rent Review Clause” from the Landlord (via their management company). This variation would remove a 10 year ground rent doubling clause and would instead replace it with a clause which increases the amount of ground rent payable in line with the Retail Price Index (RPI) every 10 years for the remainder of the lease term. Essentially for the cost of £795 the landlord (Ishguard Limited) are “prepared to offer a Deed of Variation for the reduced premium relative to the value of the reduction of their future income of £5,000.00, payable prior to completion” I understand this to mean £5,000 would be payable on completion of the variation. I’ve been trying to understand whether this is beneficial from a personal and saleability point of view. PERSONAL The ground rent is currently £225 from a lease commencement date of 01-Jan-2015. I am not planning to sell the property anytime soon so this would mean that that the rent would be: 2015 - £225 per year 2025 - £450 per year 2035 - £900 per year 2045 - £1,800 per year 2055 - £3,600 per year After this point I’ll be long gone so no worth worrying about Based on this changing to RPI seems to make sense since this increased circa 30% over the last 10 years as opposed to doubling… My question is based on this is it worth doing - I keep flipping as to whether this makes financial sense or not? SALEABILITY The letter I received states that “concerns have been raised around the saleability and mortgage ability of properties that have leases containing such clauses.” I seem to remember reading about these a while back but was wondering if anyone else had a similar view as to whether these clauses are a negative from a saleability point of view? Thanks for reading this far and I would genuinely appreciate any responses, even its to just confirm my thinking (which is that this seems worth doing).
  3. Hi I have recently had an offer accepted on a ground floor flat. On review of the lease I noticed that there is a ground rent escalation clause, with the ground rent (set at £250) doubling every 15 years. The building was built in 2015 which is when the lease started. The term of the lease is 125 years. The issue is that I was hoping to buy this on a buy to let mortgage with a 25% deposit. However I understand that lenders are not keen on lending on ground rent escalation properties. Has anyone had to deal with this and what is your experience with the lender? Which lender did you you use? The property is being bought under my SPV company. With the ground rent doubling very likely to be abolished are lenders still not keen to lend? I am really keen on this property and do not want to lose it, therefore if a lender wilL not lend then the only option i may have is to ask the seller to commence a lease extension and assign this to me. The alternative is to seek the landlord to vary the clause in the lease however I don’t think that he may be interested in doing this. Grateful for your comments
  4. Hi, I have seen so many interesting ground rent investments on action, but what are your obligations as the freeholder of the ground? Are you responsible for the insurance and maintenance of the full property? So if the roof or brickework had issues you need to fix/pay for it? All the best. Folkert
  5. So I'm purchasing a leasehold flat in Liverpool and the ground rent is £300. I was unexpectedly notified by my solicitor that because the amount is over £250 (£1,000 in London), then the lease falls within the Housing Act 1988 and will be legally classified as an AST. The term however is 250yrs. My solicitor advised that because of this AST classification, the lease is not CML (Council of Mortgage Lenders) compliant- and 'many high street lenders are not willing to grant mortgages on such leases'. This has gotten me particularly nervous as I'm due to exchange next week..... Has anyone else come across this issue? Does it pose a genuine threat to securing a mortgage? Thanks
  6. Hi all I have recently had an offer accepted on a property. The terms of the lease state that the ground rent will increase from £250 per annum from 2017 every 10 years by £250 by a maximum of 5 times to £1500 in 2067. So £250 from 2017 to 2027 £500 from 2027 to 2037 £750 from 2037 to 2047 £1000 to from 2047 2057 £1,250 from 2057 to 2067 £1,500 from 2067 to 2077 RPI thereafter Is this something I should avoid? EA says if it was to double he would avoid but increase of 250 every 10 years is ok considering inflation, paid amounts, RPI and value of the pound e.g. 50 years ago, £250 would be the equivalent of £4407 in today’s money Any advice or opinions much appreciated Thanks Adib
  7. I am currently part exchanging my apartment with a developer in order to buy a house from them. They have stated they require a Deed of Variation to change the lease because of a similar issue. My ground rent is £250pa, which turns the 141 years left on the lease in to an AST lease. So they want me to pay for the change of the lease so that the ground rent falls in line with the 0.1% mark, making it £180pa. I have no idea if the freeholder will accept this, and if they don’t whether the developer will pull out of my PX? Any help would be appreciated! Dan
  8. Hi I would be interested in hearing from anyone who bought a property from Lowena Homes/The New Homes Company in Cornwall in or around 2008/2009/2010 and did so with the help of their ‘help to buy’ type scheme. I would be particularly interested to hear from anyone who has tried to have the additional ground rent in their lease removed and also from anyone who used the solicitors recommended to them by Lowena Homes when they purchased their property. Basically, as I used their help to buy scheme when I purchased my apartment in St Austell, I was loaned my deposit by the developers to be paid back within 10 years interest-free, so they own a second charge on the property. But I was also advised at the time that as I was buying the property through this scheme I would have to pay an additional monthly ground rent of £70 per month along with the usual quarterly ground rent of £50 per quarter. I was advised that this was all perfectly normal. I was being advised by their in-house financial advice and legal team to 'make the purchase easier and less stressful'.which, as this was my first purchase, was so I thought, a great help to me. So I was led to believe by them that this additional ground rent was purely to do with the help to buy scheme. But what I have subsequently discovered recently when I have now come to try and sell the property is that what Lowena Homes, their in-house advisors or their in-house solicitors neglected to say or highlight to me was that this additional ground rent charge would then be written in to the lease, so it would then be passed on to any future owners of the property! I have subsequently had 2 potential sales fall through and no one will now touch it with a barge-pole due to this clause in the lease, which was only written in as I was using the help to buy scheme, so surely future purchasers of the property should not be penalized as a result? Lowena Homes/The New Homes Company has since ceased to exist (surprise surprise), a former associate inherited the second charge and the freehold on the apartment block was sold on to E&J Estates. (And as far as I am aware was not offered for sale to any of the leaseholders). This issue has since been raised with both the person who has taken over the second charge and E & J Estates but, Quelle surprise, it seems to be falling on deaf ears. I am currently seeking legal advice and there are a number of options we can take but my solicitor also suggested I put some feelers out to see if there's anyone else out there in a similar situation to myself, hence this post. And if someone reading this did a similar thing back then and is currently unaware of this issue they may have inherited, my advice to you is check your lease!
  9. Good afternoon, I am going through the conveyancing process for purchasing a property (to let) in Liverpool. The details of the property are as follows: 1 bedroom. Purpose built flat in a small block. Built in 2017. Currently tenanted for £500pcm. Could realistically achieve £525pcm. ISSUE I have just received the following preliminary advice from my solicitors: Ground Rent- The ground rent is currently £250.00 per annum, and it will be reviewed every 10 years. On the first 5 review dates, the ground rent will be increased by £250.00 per annum on each review date. This means by the 50th anniversary of the term, the rent will be reviewed to £1,500.00. From and including the sixth Review Date, The rent will be greater of a (1) the rent payable immediately before the relevant review date or (2) the indexed rent which will be determined in accordance with RPI. I would be grateful for your thoughts on the above paragraph. It looks to me like a rather bad deal (for me), however I may be perhaps a bit too defensive / cautious and this could be par for the course. Assuming I can raise the rent by 2% per year every year (I think that is perhaps unrealistic, however is good for sums!) then by year 10 the rent will only be approximately £600 - far short of the £500 that the Ground Rent will have shot up to! Yours ever.
  10. I invested in a 2 bed flat in Digbeth, Birmingham, which on the whole I'm very happy with, however Seven Capital have just sent me a Section 5A Offer Notice, through their lawyers. The original agreement to sell the freehold has been rescinded, so we as landlords are being given the opportunity to buy the freehold as a legal obligation. I personally have no desire whatsoever to own the freehold at this point, given that it's a hands off investment in a city I don't live in. Even if I did want to buy a share of the freehold, I would have to contact hundreds of other landlords to ask if they want to do the same. Is there anything else I should be wary of? I assume the terms of the lease would remain the same so that my ground rent exposure won't change. Do I need to respond to this? Do I need to consult a solicitor? Many thanks for advice and any discussion would be interesting.
  11. 1 month before the development is due for completion, I have just recieved this message from my solicitor. Has anyone any experience in this and should I accept or reject this 10 year rent review provision? “Good Afternoon, We have received notification from the sellers solicitor that their client is proposing a change to the format of the Lease for the XxxX Development. The Seller has proposed that the Rent Review provisions be changed to allow for a rent review on each tenth anniversary of the Lease and any such increase would then be in line with RPI. In addition to this, the Landlord is proposing to reduce the Ground Rent from £300 to £275 per year. The contract does not allow the seller to make changes to the Lease without your prior consent (although such consent cannot be unreasonably withheld) and so we would be much obliged if you could confirm whether you are happy with the above proposal? Kind Regards Solictor”
  12. Hello all. Me and my friend end have been in he process of buying a new build and nearly became victims of the recent spate of developers looking to charge £250 ground rent on the leasehold which doubles every 10 years. For anyone unaware of the problem with this have a quick read of this article from the guardian: https://www.google.co.uk/amp/s/amp.theguardian.com/money/2016/nov/05/ground-rent-scandal-engulfing-new-home-buyers-leasehold We have been advised by our solicitors to pull out of the deal but are of course hesitant because it is a great location and we are so far down the line. Has anyone any experience with this and can offer any advice? Has anyone managed to buy the freehold? How Much did that cost? Has anyone been able to re-negotiate the ground terms? Thanks very much for all your help! James
  13. Slightly odd situation - I'd be grateful for Hubbers' views: A friend has inherited the freehold to a block of flats which his father built. The leases are all 999 years from the early 1970s and provide for an annual ground rent of £15 per flat. With 24 flats this totals £360 per year. There is no provision in the lease for increasing the ground rent, so as things stand it will just continue at that level. Not sure who manages the block, but it is not something my friend is interested in taking on. He has asked whether there is anything he can do. Over time he sees the income as more trouble than it's worth and, unless something can be done to increase the ground rent, he would rather just get rid of the freehold. Any thoughts?
  14. Hi, I made my first BTL purchase last year on a 1bed flat that is part of 4 flats in a block. The block is a leasehold with 125yrs remaining. One of the other investors in the block has recently contacted me saying we may all have an issue with one of the clauses stated in the lease. Being new, I'm not sure if this is a problem and would appreciate some experienced advice. The clause appears to be a "doubling of the ground rent every 10years" (the actual wording is incredibly cryptic, but this is my understanding). According to the other investor, this may become a problem for lenders who will not wish to lend on the property in future with such a clause. Has anyone heard of this type of arrangement, and if so, is it something that may cause an issue for a future re-mortgage? Thanks! Lee
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