Mortgage not approved - ground rent too high, have you ever heard anything like that?

[MrMoore]

Hello,

 

I'm looking to purchase a property in the value of £80k.

The ground rent is £150 which makes perfect sense.

 

Lenders classify this property as a new-build (even though it was built in 2014, it's still under the developer's name)

 

A few lenders denied the mortgage application stating that the GR is too high (higher than 1% of the property value) which I have never heard of before.

 

What's the logic behind this?

 

Thanks

[DotCotton]

Is it £150 per month or per annum, if it's per month then yes, it is very high .. In fact higher than the cost of a mortgage on 75% of the value of he property !

[MrMoore]

Annum

[DotCotton]

I’m aware of a few lenders who have a 0.1% value restriction on ground rent but yes, it does seem that they might have got their maths wrong here.

 

Alternatively could your broker have put the figure in the wrong column ?