Doubling Ground Rent

[James Cooney]

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

[paulrybak]

Hi James 

No personal experience of this but if i were you I'd definitely be negotiating. Both you and your friend should negotiate together to increase your negotiating power. You'll struggle to sell it on as it stands so it really is deal or no deal.

Cheers 

Paul 

[James Cooney]

4 minutes ago, Paul said:

Hi James 

No personal experience of this but if i were you I'd definitely be negotiating. Both you and your friend should negotiate together to increase your negotiating power. You'll struggle to sell it on as it stands so it really is deal or no deal.

Cheers 

Paul 

 

 

Cheers Paul

 

any idea how much the freehold should be approx? What is the value of it tied to?

[Tim Wragby]

The cat on this appears to be out of the media bag with this scam and it looks likely that it is only a matter of time before it will either be banned or dropped and leave a lot of very unhappy buyers who have properties that they'll not be able to sell and to be locked into properties that will have eye-watering ground rents in time with the ground rent probably exceeding council tax in 30 years and once the clock is ticking no one will buy - therefore no real investment.

 

It will cost you less to pull out now than the devaluation later.  It might strengthen your negotiating hand by saying you are walking away from the deal unless they make it freehold and that you will broadcast the situation to as many as you can tell so the developers end up with a white elephant on their hands with other buyers pulling out too - if this happens you could pick up a bargain in a fire sale - but make sure you're buying freehold

[paulrybak]

Hi James 

No idea of the cost but you could say you want it for free as your negotiating start position. Don't ask, don't get and all that!

[Becky0904]

Hi James, 

 

I would be interested in hearing how this played out?

 

I am in a similar situation myself, received the pack from my solicitors for a 12 year old flat I was hoping to complete on this month. My solicitors haven't advised against completing but I noticed in the lease the ground rent doubles every 10 years, from £75 in 2006; currently £150 until 2026.

 

My solicitor is asking the vendors solicitor to query with the freeholder if this can be re-negotiated.

 

Any further advise would be greatly appreciated. 

 

Becky 

[Becky0904]

Hi Damien,

 

Thanks for your reply. 

 

Hoping for some sort of assurance from the freeholder before I proceed.

 

After a 3 week wait the response to enquiries from the freeholder was a link to an article on the website. Currently frustrated as it feels like neither the vendor's solicitor nor freeholder has grasped my enquiry......

 

Becky